Sailun eyes production ramp-up in Mexico, Indonesia as first tires roll off

Qingdao, China – Sailun Group expects to begin commercial production at its new tire manufacturing facilities in Indonesia and Mexico by the end of this year, according to company announcements.

The first tires rolled off production lines at the greenfield plants in Central Java, Indonesia, and Guanajuato, Mexico, in late May, the Chinese tire maker said in social media posts.

In separate statements, Sailun described the factories as key assets in its globalisation strategy, aimed at optimising capacity layout and improving delivery times to international markets.

“The Mexican factory will give full play to the advantages of localised operations… [to] continuously improve product competitiveness and better serve North America, the world's core automotive market,” Sailun stated in a 30 May social media post.

Earlier this month, Sailun executives said both facilities were on track to begin commercial production by the end of 2025, supporting the group's broader international expansion goals.

Speaking during a 21 May earnings call, Sailun leaders said the new plants would enhance the group’s ability to manage potential trade barriers, including tariffs imposed by the United States.

According to group officials, Sailun currently exports most of its tires to the US from plants in Vietnam and Cambodia, according to group executives.

Under existing US tariff rules, its passenger car and light truck tires are subject to a 25% duty under the auto parts provision, while other products face a 10% tariff, which is currently suspended for a 90-day period.

“At present, the group's production and operation are normal, and production and delivery are normal, but there is still a certain degree of uncertainty in the tariff policy,” executives said.

Sailun broke ground on the greenfield tire manufacturing plant in Demak city, Central Java province, in September last year. (ERJ report)

The $250 million (€230 milion) tire factory will have the capacity to produce 3.6 million units of tires and 37ktpa of off-highway products. 

The group's $240 million Mexican joint venture facility, meanwhile will have the capacity to produce 6 million units of passenger car tire per year. (ERJ report)