China tire industry foresees "low growth" as PCR sector faces overcapacity

Beijing – China's tire industry continued to expand in the first half of 2026, but widening differences between truck and passenger tire markets are putting pressure on manufacturers, according to the China Rubber Industry Association (CRIA).

China produced 607 million rubber tires in the six months to 30 June, up 2% year-on-year, CRIA cited the National Bureau of Statistics data 18 Sept.

Among CRIA's key member companies, tire output rose 2.1% to 301 million units, while sales increased 3.5% to Yuan114.88 billion (€14.9 billion).

TBR production increased 10% to 64 million units, while PCR output fell 1.7% to 220 million units.

The contrasting performance was also reflected in capacity utilisation: average utilisation at Chinese TBR plants reached 79.4% in the first half, compared with 75.5% for PCR plants.

CRIA said the TBR operating environment was “significantly better” than that for PCR.

In 2025, the corresponding utilisation rates had been 74.6% and 79.7%, respectively.

The association linked stronger TBR performance to rapidly rising penetration of new-energy heavy trucks in China and “high prosperity” in overseas commercial vehicle markets.

PCR producers, meanwhile, are facing significantly greater capacity and pricing pressure.

CRIA said the domestic PCR replacement market had entered a “severe survival test”, following the release of "more than 100 million units" of new PCR capacity over the past two years.

The resulting pressure has contributed to “vicious price competition”, falling volumes and profits at retail outlets and rising channel inventories, it added.

The market has entered a “period of destocking and reshuffling”, according to the association.

Exports also showed signs of pricing pressure. China exported 4.56 million tonnes of tires in the first half, up 4.6%, while export value increased just 2% to $10.88 billion (€9.48 billion).

CRIA described the performance as demonstrating the “strong resilience of China's tire exports”, but noted a clear trend of “rising volume and falling prices” amid intensifying global competition and trade barriers.

Among the association's key companies, export deliveries fell 1.4% to 141 million tires, including 21 million TBR tires, down 0.3%, and 112 million PCR tires, down 3.7%.

Export sales value declined 4.3% to Yuan45.16 billion (€5.78 billion), while exports represented 46.7% of total tire deliveries. Inventories stood at Yuan29.23 billion, down 0.9%.

In the meantime, Chinese tire makers are rapidly expanding their global footprint.

According to CRIA, Chinese tire makers' overseas factories are estimated to have had a combined TBR and PCR capacity of over 200 million tires in 2025, with further capacity planned.

The association said overseas investment had evolved from an option into a “necessity” as manufacturers respond to tariffs and technical barriers, marking a shift from “product exports” towards “manufacturing overseas”.

Looking ahead, CRIA expects the industry to enter a period of “low growth” in 2026, with further consolidation as leading manufacturers expand their share through overseas capacity, technology and brand positioning.

Smaller manufacturers, it warned, will face an increased “risk of elimination”.

Overall, CRIA said China's tire industry remained under short-term pressure from raw-material volatility, trade barriers and uneven domestic demand.

The longer-term market, it said, would increasingly favour companies with “technological accumulation, compliance capabilities and overseas operating experience”.

Chinese tire makers' overseas capacity and plans

Capacity: 10,000 tires/year