Linglong terminates planned €1bn Brazil tire plant project

Shanghai, China – Shandong Linglong Tire Co. Ltd has announced the termination of its previously announced investment project in Brazil (ERJ report) after failing to reach agreement with its proposed partner on “core terms” including shareholding ratios and cooperation conditions.

In a 27 May filing to the Shanghai Stock Exchange, Linglong said the project was “no longer in a position to proceed as scheduled” because the two parties “failed to reach consensus on core clauses such as shareholding ratio and cooperation conditions.”

The Chinese tire maker had originally announced plans in April 2025 to jointly invest with Paraguay-based tire distributor/importer Sunset SA Comercial Industrial Y De Servicios for the JV project.

The project included the annual production of 14.7 million units of various high-performance radial tires as well as a 35MW photovoltaic power station.

According to the latest statement, both sides have now “reached consensus on terminating the cooperation,” with follow-up procedures to be completed after internal approvals by each party.

The tire maker described the move as a “prudent decision” made “based on changes in the market environment, strategic adjustment by the company and actual operating conditions.”

Linglong said the project “has not yet entered the stage of substantive construction investment” and therefore “will not have an adverse impact" on its business development and daily operations.

Linglong said it currently operates “five production bases in China and two overseas production bases” and plans to continue “intelligent upgrading and transformation” of existing facilities in order to improve capacity utilisation.

The company also said production capacity can be “flexibly allocated between bases,” helping ensure “supply chain resilience and production flexibility.”

At the same time, Linglong said it would “accelerate site selection work for other overseas factories.”

The group added that it would continue advancing its “three upward” strategy — “brand upward, product upward and channel upward” — in order to “steadily enhance global influence and market reputation.”