"Chinese Tires Face Global Ban!"

Recently, Brazil has initiated an anti-dumping investigation against Chinese tires, marking another round of suppression following similar actions by the United States, the European Union, India, Thailand, South Africa, Mexico, and other countries and regions, with the fundamental aim of boycotting Chinese tires.

Since the double anti-investigation by the United States in 2008, Chinese tires have repeatedly been targeted by numerous countries around the world. These countries often impose high tariffs on Chinese tire products under the pretext of anti-dumping and countervailing duties, in an attempt to force out Chinese tires and drain trade profits.

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As the world's largest tire-producing country, China's annual production in 2023 approached 10 billion units, accounting for about 50% of the global capacity.However, in recent years, the sales of Chinese tires have not reached one-fifth of the global total, with profits falling again and again, and production and sales are completely out of proportion.

It is heartbreaking that Chinese tires, which are bullied abroad, also have a hard time at home. Consumers generally believe that imported tires have better quality and safer guarantees, and often turn a blind eye to domestic tires.

Why are Chinese tires not recognized domestically? What makes Chinese tires big but not strong?

When it comes to car tires, many people only remember a few international brands such as Michelin and Bridgestone, and seem to have no impression of local brands.In fact, the development of Chinese tires has a century-long history.

In 1920, the first tire in China was born in Shanghai. In terms of the concentration of technological capital and the convenience of transportation conditions, Shanghai is undoubtedly the best choice for the development of the tire industry.

In 1980, SAIC Motor cooperated with Volkswagen of Germany to establish Shanghai Volkswagen. To match the Santana sedan, the German tire production line was introduced, and passenger car tires were produced by Shanghai Zhengtai Rubber Factory.

After the reform and opening up, in order to build Shanghai into an international financial, trade, and technology center, Shanghai transferred non-core industries such as tire manufacturing outward.

Relying on China's earliest oil field (Shengli Oilfield), one of the best chemical engineering colleges in China (Shandong Institute of Chemical Technology), and advantages such as convenient transportation and abundant labor force, Shandong has become the best gathering place for the tire industry.With the strong support of the local government, including land allocation, credit support, tax incentives, and comprehensive matching measures, factory buildings are rising on the land of Shandong.

The world's tires look to China's Shandong, and China's tires look to Dongying Guangrao.

Today, Shandong tires account for a quarter of the global tire production capacity, and Guangrao tires alone account for one-eighth of the world's share.

In Guangrao alone, six companies have been included in the 2022 Global Top 75 Tires, making it a veritable tire manufacturing base.

Walking into the tire production workshop in Guangrao, rows of automated production equipment are busily operating, workers skillfully operate according to the process, and after a series of precise processing procedures, the square rubber materials are transformed into shiny black new car tires.Rubber tires, as a characteristic leading industry of Guangrao County, have now formed an industrial system that integrates tire molds, steel cord fabric, tire capsules, rubber auxiliaries, and carbon black, with a very solid industrial foundation.

"We are very confident in exploring overseas markets," said Zhang Jianbing, the foreign trade head of Shandong Huasheng Rubber Group. Currently, the company's high-end wear-resistant truck and bus tires and other products have been exported to more than 150 countries and regions.

In fact, Chinese tires did not initially consider exporting; all of this was forced by circumstances.In the early 1990s, China gradually opened up its market economy. Foreign giants such as Michelin, Giti, Kumho, Goodyear, Bridgestone, and Sumitomo entered the Chinese tire market one after another.

With the rapid development of China's automotive industry, domestic tires also transitioned from extensive production to scaled operations, and the gradual release of production capacity has driven the market to prosperity.

As a supplier for the Shanghai Volkswagen Santana, the Warri tire also became a well-known national brand.

In 2001, Michelin and Warri established a joint venture, with the agreement that Michelin would provide technology, focusing on the mid-to-high-end market; Warri would provide channels, focusing on the low-end market.

With the help of Warri's channel resources, Michelin almost secured all the tire supplies for Shanghai Volkswagen's joint venture vehicles.With an overwhelming advertising campaign and a variety of marketing tactics, foreign brands such as Michelin quickly captured the Chinese market.

Faced with the aggressive financial advantages and brand dominance of foreign capital, domestic tire manufacturers largely surrendered the domestic passenger car tire market, retaining only a small amount of low-end production capacity and shifting their focus to the research and development of commercial vehicle (trucks and buses, etc.) tires.

Coincidentally, during the era when the railway network was not yet developed, logistics mainly relied on road transportation, and the emergence of a large number of heavy trucks gave rise to the scale of the truck tire market.

A heavy truck is typically equipped with 6-8 tires, and under the road conditions at that time, a tire often lasted no more than 3 months. Being cheap and durable became the greatest demand of truck drivers.

In response to the usage characteristics of truck and bus tires, domestic enterprises in our country have successively developed tire products with good wear resistance and strong load-bearing capacity, and have used this performance advantage to open the doors to overseas markets."Back then, with tires for export, we never worried about not being able to sell them; we could make money just lying down."

Durable, affordable, and sturdy with excellent wear resistance, such high cost-performance commercial vehicle tires are very popular with overseas users. Foreign trade orders came in like snowflakes, and domestic tires finally made a beautiful comeback.

From then on, Chinese tires went global, and the substantial profits fed back into Chinese companies to continuously improve their technology. The quality of passenger car tires also improved rapidly and can now compete with foreign brands.

In 2016, CCTV conducted a comparative test between domestic tires and imported big brands, including data on tire thickness, impact, braking, burst, and noise.

The test showed that the performance indicators of domestic tires are on par with imported big brands, and some are even slightly better.Other institutions have also conducted similar tests, and the results have proven that: in terms of performance indicators such as braking performance, cold and heat resistance, and wet grip, domestic tires have a significant advantage.

The safety and practicality of Chinese tires can be seen from this, and not only that, but most importantly, the price is also very cheap.

With an ultra-high cost-performance ratio, Chinese tires, especially commercial vehicle tires, are invincible internationally and have gradually dominated the American market. Starting from 2005, China surpassed the United States to become the world's largest tire-producing country.

However, the temporary glory has created a huge hidden danger.In 2008, the United Steelworkers Union in the United States filed a complaint with the government, alleging that due to China's dumping of tires in the U.S., a large number of rubber workers were left unemployed.

Upon hearing this, the Obama administration immediately launched an anti-dumping and countervailing investigation on Chinese tires, ultimately imposing heavy tariffs on them, thus opening Pandora's box.

When the Trump administration came into power, they followed suit and initiated a trade war against China, with Chinese tires being subjected to additional special tariffs.

Furthermore, the United States also formed alliances, mobilizing the European Union, Brazil, India, and others to jointly boycott Chinese tires. Other countries also followed suit, using anti-dumping as a pretext to protect their own enterprises, and frequently imposing anti-dumping duties on Chinese tires."Originally, profits were close to 20%, but now they are less than 5%; the foreign trade business is no longer viable."

The successive suppression by countries such as Europe and America has dealt a heavy blow to Chinese tires.

Looking back at the domestic market, at this point, more than 80% of the domestic passenger car tire market has been occupied by foreign brands.

In order to survive in the narrow space, many enterprises have been forced to resort to desperate measures and have joined the low-price competition.

Originally, when Michelin and Warri cooperated, they had agreed on market division. However, in order to dominate the market, Michelin did not hesitate to continuously lower prices, fighting its way from the mid-to-high-end to the low-end, encroaching on the low-end market that originally belonged to Warri, ultimately leading to the dissolution of their cooperation and a parting on bad terms.The fierce and vicious competition, coupled with a severe overcapacity in tire production, has led to a series of market stampedes and triggered a dense wave of bankruptcies and closures.

Among them was Yongtai Rubber, which once ranked in the top 10 of Chinese tire companies and 32nd globally.

To avoid the impact of trade sanctions and tariffs, capable local tire companies began to seek a breakthrough. They turned their attention to countries in Southeast Asia and chose to invest and build factories there.

Among them, local enterprises such as Linglong, Zhongce, Sailun, Senyuan, and Double Coin have all established their overseas tire production bases in Thailand.Subsequently, Thailand's tire manufacturing capabilities have been continuously strengthened, leading to a significant increase in the export of commercial vehicle tires to the United States. Consequently, this resulted in the U.S. imposing trade sanctions on tires originating from Thailand.

The relentless pursuit and suppression of Chinese tires by the United States and the West have forced Chinese companies to engage in guerrilla warfare with them.

Senqi Linyu has restructured its overseas factories in Spain and Morocco, Linglong has established a base in Serbia, Sailun has located its second overseas factory in Cambodia, and Sinochem Group has entered the high-end market through the acquisition of the Italian brand "Pirelli."

Through repeated suppression and resistance, Chinese enterprises have become more courageous and resilient, learning lessons and gaining wisdom from these experiences.

In the past, whenever tire products were sanctioned by the United States, China would often appeal to the WTO, but without success. Later, Chinese companies pooled their resources to hire prominent American lawyers to fight trade lawsuits, and they actually won several cases.In 2023, facing the anti-dumping sanctions imposed by the United States, Senkyou Thailand argued rationally and actively responded to the lawsuit, ultimately forcing the U.S. Department of Commerce to reduce the original tax rate from 17.06% to 1.24%.

Over the years, although China's tire production and sales volume ranks first in the world, the profit from Chinese tire exports has been decreasing.

"Accounting for half of the global sales volume, yet only having one-fifth of the global sales revenue, it is not even comparable to the profit of Michelin alone."

The current situation of Chinese tires being "big but not strong" is heartbreaking.Although China's tires have opened up the international market with price advantages, without a brand there is no say, and without core technology there is no value.

In recent years, the country has been continuously strengthening its efforts in the field of new energy, promoting the emergence of local new energy vehicles, and local tire companies have also taken the opportunity to innovate technologically, ushering in a historic opportunity for development.

In the past, a bad habit was formed in the domestic passenger car tire market: foreign brand cars often used foreign brand tires, and the high-end market was mostly monopolized by Michelin, Continental, and others, with only economical domestic passenger cars equipped with domestic tires.

With the strong rise of China's new energy vehicles, the dual monopoly of foreign brands in the mid-to-high-end market and market share has been completely broken, and Chinese tire companies that are equipped with them have shone brightly.

At present, Linglong Tires has been equipped with many mainstream new energy vehicle models in China, such as BYD, Geely, Renault Nissan, Honda, SAIC General Motors Wuling, etc. Taking the third quarter of 2023 as an example, Linglong Tires accounted for 24% of the new energy vehicle tire matching share.The Spring of Chinese Tires Has Finally Arrived.

"The Chinese tire industry, through years of accumulation, will continue to demonstrate strong competitiveness in the global tire competition," claims Yang Xun, Chairman of Kumho China, during a media interview.

In 2023, Chinese automobiles surpassed Japan and Germany for the first time to become the world's largest exporter of vehicles.At the same time, China's annual tire production reaches 988 million units, with sales accounting for 56.46% of the global market, both ranking first in the world, setting historical records.

However, it is a case of "flowers blooming on the wall and their fragrance spreading outside," as Chinese tires that dominate the international market do not receive widespread recognition from their own people.

"Domestic tires don't have much of a reputation, and I'm not confident in buying them."

In the eyes of ordinary consumers, domestic tires started late, have a weak foundation, and a small reputation, and their technology and quality may not be as good as those from abroad. Some people always think that domestic tires are of low grade and that there are no good things that come cheap.

In the view of many dealers, because domestic tires are not well-known and are cheap, they are not as easy to sell or as profitable as foreign brands.Certainly, there are also some tire companies that, in order to cater to the developed markets of Europe and America, have adopted double standards both domestically and internationally. Some sell the same quality at different prices, while others offer the same model with different quality, seriously hurting the feelings of the people in their home country.

Moreover, foreign brands focus on promotion and suppress domestic tires, making local brands feel invisible in their own backyard.

Fortunately, today's leading domestic tire companies have enough confidence to challenge international brands.

Recently, Tire Business, a publication in the United States, released the 2023 Global Tire 75 Strong list, with a total of 36 Chinese tire companies on the list, among which Zhongce, Cheng Shin, Sailun, and Linglong have entered the top 20.As a sponsor of the renowned Italian football club Juventus, Linglong Tires has already gained a certain level of international recognition.

Warrior, once a brand of the past, has also evolved. It has specially developed and customized a new brand of tires called "Feiyue" for Tuhu, and after in-depth cooperation with internationally renowned automotive companies, it has made a significant leap into the international mid-to-high-end market.

Once considered low-priced and low-end, domestic tires have finally gained respect and their brand images have grown increasingly prestigious. Meanwhile, foreign brands that once dominated the Chinese market are fading away at a visibly rapid pace.

In September 2023, Bridgestone decided to close its commercial vehicle tire sales business in China, following the footsteps of other international tire giants such as Yokohama, Kumho, Sumitomo, and Dunlop, who have withdrawn from the Chinese market.

The grand and inspiring history of China's tire development mirrors the great rejuvenation of the Chinese nation, revealing an eternal truth: falling behind leads to being beaten, and to forge iron, one must be strong oneself.Domestic products must strive for self-improvement, a long and arduous task lies ahead.

When purchasing tires next time, would you choose a domestic brand?