Sydney, Australia – Chinese tire industry is expected to grow at a CAGR rate of 4% between 2017-2020, according to a market research report by WhaTech.
Published on 18 Jan, the study found that steady growth in the global car market and rapid growth in the Chinese automotive market had stimulated the market to recover slightly.
“The global tire shipment increased by 2% year-on-year to 1.963 billion units, while China's automotive tire output edged up 1.2% to 572 million units,” the report added.
The operating rate of the Chinese market, said the report, rebounded significantly in 2016 with an uptrend in the off-season after October.
“In early December, the operating rates of all-steel tire and semi-steel tire plants stayed at 72.7% and 73.4% respectively, 10.5 and 7.5 percentage points higher than the same period last year each,” the report added.
Another factor contributing to an improving Chinese market was a rise in natural rubber prices, which stabilised tire prices in the second half of last year.
Most tire companies, noted the report, announced prices rises at the end of December, including Michelin, Bridgestone, Continental, Pirelli, Goodyear and other international first-tier brands.
China’s export volume, which had been impacted by US anti-dumping and countervailing investigations, was restored in 2016, and increased by 7.3% year on year from January to November.
Export to the US market, however, declined.
The report expected pressure on the Chinese tire industry in January as a final ruling will be made about anti-dumping and countervailing investigations on China's truck and bus tires, in addition to president Donald Trump’s the austerity??? policy.
In addition to investments by major brands in China and the Chinese tire industry’s offshoring operations to Thailand and other south east Asian countries, another significant trend was around mergers and restructuring of Chinese tire companies in 2016.
Some of the key events were the takeover of Yellow Sea Rubber and Double Happiness Tyre Industrial by Aeolus Tire, while Hengfeng Tires bought the assets of Derebao and Shandong Haolong Rubber Tire.
"In 2017, the corporate integration trend will be more obvious, the report concluded," the report concluded.