◎ Hao Zhangcheng

At present, the bicycle sharing industry which was considered to “overturn the development track of bicycle industry” gradually “cools down” and develops towards optimization and adjustment, the new national standard on electric cycles which is known as “revolution in electric cycle industry” has been published for one and a half years, what influences do these bring about to three products in cycle tire industry, bicycle tire, electric cycle tire and motorcycle tire? And how the product structure is adjusted and changed to adapt to the development of the situation?

When being interviewed, Chen Zhihai, secretary general of China Rubber Industry Association (CRIA) Cycle Tire Branch, expressed that: “Cycle tire industry has silently had profound change and is striving toward high-quality development direction.”

With reduced demand and low profit, where is the direction of industry consolidation

According to the economic operation conditions of cycle tire industry in the first three quarters of 2019 published by CRIA, the growth in the output value and sales revenue of the key enterprises had a year-on-year (same below) decrease of 5.5 percentage points and 1.4 percentage points respectively. Growth in output of leading products: the bicycle casing had an increase of 1.49%, the electric bicycle casing had a decrease of 2.89% and the motorcycle casing had an increase of 10.77%; the profit rate of the sales revenue was only 2.06%, which increased by 0.28 percentage points.

Chen Zhihai introduced that viewing three leading products on the whole, the demand of bicycle tire returned to normal along with rapid decline in supply amount of shared bicycles, the total demand of electric cycle tire (electric bicycle tire and electric motorcycle tire) turned from the phase of rapid growth into the phase of steady development, and the total demand of motorcycle tire moved from basic steadiness to slow attenuation.

The output of motorcycle has declined for 10 consecutive years, which resulted in decrease in supporting demand; among three leading products, the first to decline is motorcycle tire, which is a product with a relatively good benefit. The demand for bicycle tire is not as large as it used to be, the export amount of bicycles accounted for about 71% of the total output in recent ten years, and even 75% in some specific years. America is the first largest market for export of China’s bicycle (accounting for about 1/8 of the total export amount of bicycle), however, the export of bicycle will face some uncertain factors in the future. Along with the implementation of the “new national standard” on electric bicycle, the industry inevitably greeted a new round of shuffle; the output and market sales volume had a large decline in April and May of 2019 and gradually and steadily recovered from June. According to the statistics of the Ministry of Industry and Information Technology, the output of electric bicycle increased by 20% in the third quarter, which increased by 11.8 percentage points compared with that in the first half year. With light weight and flexibility of the bicycle and less labor and comfort of the motorcycle integrated, electric cycle can not only be ridden instead of walk, but also be used for carrying cargo, therefore it is popular with the users in cities and towns, and express delivery of e-commerce merchants also uses a large amount of electric cycles. Compared with that of the bicycle, the international market of the electric cycle has a larger space to be developed. According to relevant data, in the Northern European countries with high per-capita average of bicycle such as the Netherlands and Denmark, the electric cycle has been popular in recent years, with its market rapidly developed, it has the potential to replace the bicycle. It is believed that for some time to come, the electric cycle tire may become the product playing a more dominant role in steady development of cycle tire industry.

Chen Zhihai thought that the change in demand of motorcycle market was obviously affected by the specific phase of social and economic development. In 2016, with its motorcycle output reaching 17.70 million, India surpassed China to become a power in motorcycle output and sale in the world, the per capita GDP of India in 2016 was USD 1729, which is equivalent to China’s per capita GDP in 2005 (USD 1753), however, the period around 2005 is the period when China’s motorcycle output and sale volume rapidly grew. Along with rapid social and economic development in China, the popularization of automobiles is accelerated, in addition, affected by “forbidding and restricting motorcycle” in 180 cities in China and replacement of electric cycle, the demand of China’s motorcycle market gradually declined after 2011. Most of the developing countries may undergo similar development phase, the difference between China and such countries may be that in such countries, no cities will “forbid and restrict the motorcycle”, the social and economic development speed is relatively slow and the duration of the growth period of motorcycle market may be relatively long, therefore, the developing countries such as India are in the growth period of motorcycle market.

The control of the change in bicycle and electric cycle demand by social and economic development factor is not as obvious as that of motorcycle demand, for example, for the short trip lasting from about half an hour to one hour, flexible and convenient bicycle or electric vehicle is still the option of means of transportation, and it is generally not affected by the consumptive power, the families possessing an automobile also will possess a bicycle, which is also the reason why shared bicycle sharing exists in many large and medium-sized cities. Before the appearance of bicycle sharing, the theft events of bicycles frequently occurred in some regions, some cities canceled special bicycle paths, which inhibits the consumption demand of the individuals for bicycles, especially high and middle-grade bicycles to some extent, otherwise, China’s bicycle demand and social inventory will be larger.

The demand for cycle tire product, a main part of all kinds of light-weight two-wheel and three-wheel vehicles, will exist for long, and will constantly change and develop along with the development of the era. The motorcycle tire will gradually develop towards the direction of high quality and high performance to cater to the constant growth of the market of medium- and large-emission motorcycles; the bicycle tire will develop towards the middle- and high-grade and personalized direction, even the electric cycle tires with relatively high population degree will be constantly improved in the aspects such as safety and easiness to use.

In recent years, the profitability status of cycle tire has been far worse than before, which is caused by the reasons of many aspects. Seen from the surface, the human cost rises, and the enterprises’ input in environmental protection and governance largely increased; fundamentally speaking, the industry has overall structural overcapacity, the homogeneity degree of the products is high, in addition, since China’s cycle tire products mainly face the mid- and low-end markets with relatively sensitive price, reducing the price to capture market becomes normal; although the space for lowering the cost becomes smaller and smaller, the enterprise operators consider more about how to reduce the production cost and R&D innovation input and make brand construction become water without a source.

The good news is that a part of backbone enterprises have gotten rid of traditional conventional thinking and lead the industry towards high-quality development. For example, the multi-functional rail tire for motorcycles and electric cycles which is independently developed by Sichuan Yuanxing Rubber Co., Ltd. and quickly accepted by the market broke the situation where China’s R&D of cycle tire followed and imitated for long; ZC Rubber Co., Ltd. has put 12 high-efficiency automatic casing forming machine into normal production, not only the production efficiency of single machine was doubled, but also the product quality is obviously improved compared with those produced through artificial operation. Appearance of high-efficiency automatic forming machine for cycle tire is another important pioneering work for upgrading of special equipment of the industry, which resolves the problems such as difficult recruitment and outflow of skilled labor to some extent while improving the product quality and production efficiency. Under the circumstances with high artificial participation, it takes about 3 months to half a year to grow from green hands to skilled casing building workers, however, after application of automatic forming machine, a worker needs 1-2 days or 4-5 days to get skilled. 

Accelerate R&D to realize upgrading of high-quality products

As long as there is market demand, the industry will exist, there is no doubt that the market demand for cycle tire products will exist for long, the key is that whether China’s cycle tire industry can transform from the traditional business mode with relatively high labor intensity and relatively low efficiency into advanced manufacturing industry with relatively high automation and intelligentization degree and relatively strong innovative ability. Seen from current situation and future development trend, compared with the emerging cycle tire enterprises in Southeast Asia, South Asia, etc. which rapidly rise in recent years, China’s cycle tire industry fully has the conditions to develop from a large cycle tire country into a cycle tire power.

Firstly, the industrial chain of China’s cycle tire industry is relatively complete, except that natural rubber and a very few special materials need to be imported and supplemented, other tooling equipment and materials can be self-supplied; secondly, in recent years, the innovation projects such as automation of production equipment for cycle tire, processing accuracy of moulds and development of new materials have constantly achieved progress, however, the market demand for high-quality cycle tire products has increased gradually, which provides the conditions better than ever for high-quality development of cycle tire industry; thirdly, with a hundred years of history in manufacturing of cycle tires, China possesses obvious comparative advantages in the global mainstream cycle tire products market.

Chen Zhihai thought that for a long time to come, China’s cycle tire industry would still be dominated by leading products (cycle tires equipped for scooters and trucks) and step towards high-performance products (cycle tires equipped for vehicles for sports competition and leisure and entertainment). However, it should be pointed out that although the mainstream products made tiny profit comparatively, they are divided into high-end, medium-end and low-end, the proportion of high- and medium-end products would be gradually expanded while the market of low-end products would gradually shrink. The tiny-profit products must obtain reasonable profit by improving the production efficiency, improving the first-pass yield, improving the market share and enhancing the R&D level of featured products, thus realizing virtuous cycle of enterprise development. Therefore it was predictable that the automation and intelligentization level of the industry would be constantly improved, and new technologies such as “big data” would be gradually applied in technical R&D and operation and management of large and medium-sized enterprises, the enterprises were in urgent demand for various talents grasping and proficient at applying  new knowledge.

“The total market demand for motorcycle tire is reduced. However, the requirement for product quality and level is constantly enhanced. The motorcycle tire output of key member enterprises increases by 10%, which indicates that the motorcycle tire takes the lead to walk towards high quality and high concentration. From the behavior of the world tire brands such as Michelin, Pirelli and Bridgestone of successively investing on two-wheel vehicle tire products and new motorcycle tire products in China and releasing such products in Chinese market, it can be seen that they have been keenly aware of the change in Chinese motorcycle tire market.” Chen Zhihai said.

Chen Zhihai expressed that not only the motorcycle tire, but also the popular products in the whole cycle tire industry paid more attention to wear-resisting and safety property of the products and transplanting several applicable technologies originally belonging to high-performance auto tire to cycle tire had become a trend, the industry was developing toward high-quality direction on the whole.

For example, Sichuan Yuanxing took the lead to develop full-function rail tire for motorcycle and electric cycle with a specification of 3.00-10, and led the whole industry to set off a wave of “rail tire”.

As for the implementation of “new national standard” on electric cycle, the backbone enterprises such as ZC Rubber, Xiamen GST, Hebei Wanda and Shandong Ji Luer launched the products such as ultra-lightweight and low-rolling resistance electric cycle tire and “run-on-flat” motorcycle and electric cycle tire, which could ensure driving of over 50km under the conditions of full air lack.

Although shared bicycle is not as popular as it used to be, the product process of injection molding microcellular foam ultra-lightweight integrated tire is kept for assembling the ordinary bicycles and electric bicycles under the specification of “new national standard” since it is simpler than the traditional pneumatic bicycle tire and has relatively high automation and greening production level, which has a broad market pros-pect.

Make collaborative innovation to realize transformation and upgrading with advanced equipment

The largest highlight during the “13th Five-year” period is that the leading enterprises in the industry and the equipment enterprises carry out collaborative innovation, have high starting point planning and implement automatic and intelligent renovation to achieve obvious results in transformation and upgrading as well as quality and efficiency improvement, thus laying a more solid foundation for the development of next phase.
 “For a long term, the medium- and small-sized and small and micro enterprises in cycle tire industry have had large proportion and small volume, the enterprises whose proportion of R&D expenses in sales revenue reaches 2%-3% can be counted on one’s fingers, we once extremely worried what can we rely on to support the transformation and upgrading of the industry. For the time being, such thought is unnecessary.” Chen Zhihai said.

ZC Rubber has applied automatic packaging machine to the packaging process which fully embodies the labor-intensive feature of cycle tires and the casing and inner tube can realize packaging. Inner tube plasma automatic cycle valve pasting device of Xiamen Kejuyuan, automatic assembly machine for inner tube parts of Sichuan Yuanxing, etc. have achieved good effect.

After automatic renovation, not only the labor is saved, but also the product quality is stable and the labor efficiency is very high. Take casing forming machine as an example, each work was responsible for one forming machine before, and the output of three shifts was only 400 units, now one person is responsible for two forming machines, the daily output is 4200 units (calculated as per 700 units/shift/machine), which means that the output of one enterprise may equal to that of 7-8 enterprises.

In addition, the gluing accuracy of the automatic gluing and rolling device for cord ply independently researched and developed by Hebei Wanda Tire is more accurate than artificial operation.

“Thus it can be seen that as long as there is the will of innovation and input, transformation and improvement of traditional industry with advanced technology will no longer remain a slogan, but will gradually become a reality; in addition, along with the popularization of 5G, the automatic degree of cycle tire manufacturing will be quickly improved. The research, manufacturing and application of these equipment as well as improvement of the processes inject new momentum into high-quality development of the industry, and the industrial concentration will step towards a higher level.” Chen Zhihai said.