Beijing - China’s tire production and sales volume recorded the first drop over two decades in 2018, against the backdrop of the first global downturn for the automotive industry in the past ten years.
The first two months of 2019 saw an even sharper year-on-year decline in the China market, said Shen Jinrong, chairman and general manager of Zhongce Rubber, during her speech at the China Rubber Conference held in Guangzhou this March.
According to data from the China Rubber Industry Association, the country’s tire production reduced by 0.8% year-on-year to 648 million units in 2018, of which radial tire production fell by 0.7% to 609 million.
“You cannot overstate the graveness of the drop in China’s domestic consumption,” said Shen.
In 2018 China’s tire makers had €397 million (3 billion yuan) profit on €21 billion revenue. “What you are seeing as the sector’s profit also covers the manufacturers’ non-main business, without which there’s basically no profit,” he said.
The US and EU anti-dumping tariffs are also casting heavy shadows as over 40% of China’s tires are exported with the two markets taking up a significant share, he added.
According to CRIA, last year China exported 5.4 million tonne tires at $13 billion, of which 40% of 2 million tonne passenger car tires and 25% of 3.4 million tonne truck and bus tires were sold to the US and EU.
Faced with such headwinds, CRIA estimates that China’s truck and bus tire production in 2019 will fall by 13% from 2018 to 116 million units. Overall production, including bias tires, is expected to decline by 1.8% to 636 million.
For further details see report titled Chinese tire makers brace for the new normal, p s7 ERJ July/August 2019 issue.