In 2019, China was the largest producer of tires in the world, followed by the United States and Japan. The vehicle sales and production registered an exponential rise in the country during 2010-19. According to the National Bureau of Statistics of China, the motorization rate in 2018 was around 35%. The rate has significantly increased from around 20% in 2013. These dynamics have transformed China into a hotspot for tire suppliers.
For geographical expansion and development of trade between countries, the Chinese government is taking initiatives to build One Belt One Road (OBOR) that would burgeon the movement of automobiles on road. For the expansion of silk roads, the demand for OTR vehicles such as road rollers, excavators and cranes have been registering an uptick, which in turn is generating OEM and replacement demand for tires.
Passenger Cars Sales Would Boost the Demand for China Tire Market
The growth in disposable income, growing employment opportunities has considerably contributed towards the flourishing of automobiles in the country. Additionally, low cost manufacturing easy availability of raw materials has transformed China into a global auto manufacturing hub.
The demand for tires has soared with the increased production of cars in the country, however, there was a slight dip in the registration of new passenger cars in 2018. The total passenger car sales in 2018 were around 23.7 million units as compared to 24.7 million units in 2017. According to the China Association of Automobile Manufacturers (CAAM). The overall vehicle production in October 2019 was around 2.29 million units, reflecting a 1.7% year on year decline, while sales totaled 2.284 million units, reflecting a 4.0% year on year decline. Therefore, the OEM sales of tires in China exhibited a slowdown in 2019.
Replacement Demand Overruled OEMs Segment
The demand for tires from OEM has been mounting on account of thrust on domestic production of the vehicle in the country. In 2018, the country produced around 27 million automobiles, despite a decline of around 4.5% over the past year. The market was majorly dominated by companies such as VW, Nissan, Wuling, Haval and Toyota, Baojun, and Geely. These companies have been catering to the local demand for automobiles in China. However, the majority of these companies have witnessed a decline in annual production over the past couple of years. However, the replacement market remains vibrant for tire sales.
The sales for tires have been generally following the offline sales pattern through dealers and distributors. Dealers and distributors cater to the overall demand for tires in the country through extensive reach. Moreover, the demand through online sales channels is rising at a considerable rate as the prices offered online are cheaper as compared to offline sales as revealed by MarkNtel Advisors’ in their research report, “China Tire Market Analysis, 2020”.
According to the MarkNtel Advisors, the major leading players are Kumho, Hangzhou Zongche, Prinx, Double Coin, Cheng Shin, Hankook, Triangle, Sailun Jinyu, Giti Tire, Aelous Tyre Co. Ltd among others. Double Coin Group in China completed the agreement with South Korean Bank Development (KDB) and acquired a 45% stake in Kumho tires and agreed to pay USD 597.4 million in 2018. Double star became the controlling shareholder while Korean development bank and other Kumho creditors hold 23% of the stake.
“China Tire Market Analysis, 2020”, provides comprehensive qualitative and quantitative insights on the industry potential, key factors such as trends, drivers, hotspots and opportunities and challenges available for China Tire market providers across the globe. Moreover, the report also encompasses the key leading players in the industry, along with competitive benchmarking and competition matrix and company profiling.
1. By Type of Vehicles (Passenger Car, Light Commercial Vehicle, Buses and Trucks, Medium and Heavy Commercial Vehicles, Off the Road (OTR), Two Wheelers, Three Wheeler)
2. By Demand Category (OEM and Replacement)
3. By Type of Tires (Radial and Bias)
4. By Sales Channel (Dealer/Exclusive stores, Online and Others)
5. By Season (All season, Winter)
6. By Price Category (Low, Medium, High)
7. By Rim Diameter (Upto 12”, 12.1” to 15”, 15.1.” to 18”, 18.1” to 20”, 20.1” to 22.5”, 22.6” to 26”, 26.1” to 35”, 35.1” to 47”, Above 47”)
8. By Region (North East & East, North & North West, South West & South Central)
9. By Company (Kumho, Hangzhou Zongche, Prinx, Double Coin, Cheng Shin, Hankook, Triangle, Sailun Jinyu, Giti Tire, Aelous Tyre Co. Ltd.)
Key questions answered in the study:
1. What are the current and future trends of the China tire market?
2. How the industry has been evolving in terms of end-user demand and application areas?
3. What are the future plans and customer expectations of end-users across the globe?
4. How the competition has been shaping across the countries followed by their comparative factorial indexing?
5. What are the key growth drivers and challenges for the China tire market industry?
6. What are the customer orientation, purchase behavior, and expectations from China tire suppliers across various regions?