◎ Yang Honghui

I. Principles of China Tire Enterprise Ranking

There are two principles of China Tire Enterprise Ranking: Firstly, “China Tire Enterprise Ranking List” is based on total tire sales volume (including export) of domestic factories and overseas factories of domestic funded enterprises in the previous year; secondly, “China Domestic Tire Enterprise Ranking List” is based on the tire sales revenue (excluding the sales revenue of overseas factory) of the factories in mainland China of all tire enterprises (including foreign-funded enterprises) setting up factories in mainland China in the previous year.

According to the above principles, the tire enterprises with normal production and sales revenue in 2017 are qualified to enter this list upon verification.

Among it, there are tire enterprises applying for bankruptcy in 2018 in the list published in this year, they had sales revenue in 2017, so they appeared in the list of 2018, however, they maybe will not appear in the 2019 “China Tire Enterprise Ranking List” or will appear in other forms (enterprise merger, etc.).

The original intention of “China Tire Enterprise Ranking” is to make the industry insiders to learn about the current status of China tire industry more clearly and make Chinese tire market more clear and transparent instead of making “Top 100 list”.

Restricted by the specification of their products (such as aircraft tire), some tire enterprises may have little sales revenue, however, they have their own characteristics and are indispensable members of tire industry. Therefore, regardless of the enterprise scale, as long as the enterprises are voluntary, they can participate in the activity of “China Tire Enterprise Ranking”.

II. Change Conditions of Tire Enterprises Participating in Ranking

There are 9 enterprises newly participating in the ranking in this year: Zhaoqing Junhong Co., Ltd., Shandong Chuanghua Tire Co., Ltd., Shandong Sangong Rubber Co., Ltd., Armour Rubber Company Ltd., Shandong Duratti Rubber Corporation Co., Ltd., Shandong Haoyu Rubber Co., Ltd., Hubei Aulice Tyre Co., Ltd., Wuhu Jituo Solid Tire Co., Ltd. and Pirelli Tire Co., Ltd.

There are 6 enterprises quitting the ranking in this year: Jiangsu HANKOOK Tire Co., Ltd., Shandong Wanshine Tire Co., Ltd., Jianxin Tyre (Fujian) Co., Ltd., Henan Shengbang Tire Co., Ltd., Shandong Changhong Rubber Technology Co., Ltd. and Shandong Jinwangda Tire Co., Ltd.

Some enterprises quit because they did not separately count up their output and sale data in China, some quit because they suspend production or become bankrupt, and some quit for their own reason.

In addition, some foreign-funded enterprises failed to register for ranking due to reasons such as tedious formalities of data extraction, too long registration approval time, and need of application for approval of overseas headquarters.

Seen from the change conditions of the enterprises participating in China tire enterprise ranking in recent 3 years, at present, China’s tire industry is in a turning period of merger and reorganization as well as transformation and upgrading. For some time to come, it will not be unexpected for China’s tire enterprises to have conditions such as name change, change of membership and market withdrawal. “China Tire Enterprise Ranking” activity can reflect the progress of reform and transformation of tire industry from another aspect.

III. Change of China Tire Enterprise Ranking List

Compared with 2017 China Tire Enterprise Ranking List, the ranking order in 2018 has a great change. Taking top 20 enterprises as an example, see Table 1 and Table 2 respectively for change of China Tire Enterprise Ranking List and China Domestic Tire Enterprise Ranking List in 2018.

Table 1: 2018 China Tire Enterprise Ranking List (Top 20) 

Unit: 100 Million CNY

Note: It includes the sales revenue data of overseas factories of Chinese tire enterprises. 

Table 2: 2018 China Domestic Tire Enterprise Ranking List (Top 20)

Unit: 100 Million CNY

Note: It excludes the sales revenue of overseas factories. 

Zhongce Rubber took the lead with 22.736 Billion Yuan and continued to top the ranking list; Linglong Tire rose to be 2nd from 3rd because of sharp increase in domestic and overseas sales revenue; Sailun Jinyu rose to be 3rd from 4th, with the growth in income of overseas factories higher than that in income of domestic market; Xiamen CST fell from 2nd to 4th; Shandong Hengfeng rose to be 5th from 9th, this company had a large adjustment in recent three years, its sales revenue data covered three companies, Shandong Hengfeng, Changfeng and Yongfeng, in 2015, but covered only two companies, Hengfeng and Changfeng, in 2016, and covered four companies, Hengfeng, Changfeng, Wosen and Mileqi, in 2017, therefore, its ranking uctuated a lot in recent three years; Xingyuan Tire rose to be 6th from 8th; Triangle Tyre remained unchanged in its ranking to be 7th; with income slightly declined, AEOLUS Tyre fell from 6th to 8th; Doublestar Group fell from 5th to 9th; Guizhou Tire rose to be 10th from 13th since its removal was to be completed and its capacity was being gradually released.

The others with great change in ranking include Shandong Haohua Tire, which rose to be 12th from 23rd for its large expansion scale plus sharp rise in sales revenue as a result of reorganization with Huadong Rubber Chemicals Co., Ltd.; Qingdao Century rose to be 21st from 26th for sharp growth in overseas sales revenue; and Ningxia Shenzhou rose to be 33rd from 41st for sharp growth in sales revenue as a result of capacity release.

The reasons for changes of 2018 China Domestic Tire Enterprise Ranking List are stated as above.

In the of cially published “2018 China Domestic Tire Enterprise Ranking List”, the ranking position of Linglong Tire is different from the publicized list. Since Linglong Tire included the export data in the sales data of overseas factories as per the report of the listed companies, its domestic sales revenue excludes the export income at the time of publicity. According to the principle of China tire enterprise ranking, in the of cially published ranking, the export data of Linglong Tire was adjusted into domestic sales revenue (total domestic and overseas sales revenue remained unchanged), therefore, the ranking of Linglong Tire was adjusted from 12th to 3rd at the time of publicity.

By analysis of the ranking, the following conclusion can be obtained:

Firstly, China’s tire industry is currently in a turning period of merger and reorganization as well as transformation and upgrading, thus the change and adjustment of tire enterprises are frequent. Secondly, the overseas factories of tire enterprises develop quickly and make great contributions to the growth of the enterprises. Under the conditions where overseas trade frictions occur more frequently, China’s tire enterprises’ going out, merger and reorganization and realizing international development strategy will become a normal in future. Thirdly, domestic and overseas large environment faced by tire industry is till severe, there is erce competition in domestic and overseas market, and many enterprises are facing large operation pressure and capital chain pressure.

IV. Conditions of Tire Production in Chinese Market

Among 60 enterprises participating in 2018 China Tire Enterprise Ranking List, 57 tire enterprises lled and reported the production and sales data. In the following, the statistical data of the factories of 57 enterprises in mainland China in 2017 (excluding overseas factories) is analyzed, excluding the data of Xiamen CST, Michelin and Pirelli Company.

1. Production and Sales Conditions of Tire Enterprises Participating in Ranking in Recent Three Years

It can be seen from Table 3 that overseas factories of China’s tire enterprises become the highlight of growth, and the benefits of overseas enterprises are better than those of domestic factories. In 2015, the overseas factories of 2 enterprises in China formed actual capacity, and there were 4 in 2016, therefore, the growth of sales revenue reaches 151.4%; in 2017, there were still 4 overseas factories, with a year-on-year growth of 74.7%, which indicates that under the conditions where overseas countries constantly carry out “double anti” on China’s tire, China’s tire enterprises increase the investment in overseas factories.

Table 3: Sales revenue Conditions of Enterprises Participating in China Tire Ranking from 2015 to 2017 

In addition, in 2017, the growth in tire output was not large, the total tire output of 57 factories increased by only 10 million units compared with that of 55 enterprises in 2016, in which, the output of semi-steel tires was flat and that of all-steel tires slightly increased by 11 million units.

2. Production Conditions of Radial Tires

Among 57 enterprises, there are a total of 48 production enterprises of radial tires, which increases by 4 compared with that in last year; in 2017, the total capacity of radial tires was 588 million units, the total output was 447 million units, and the average capacity utilization rate was 76%, which lowered by 7% compared with that in last year.

Fig. 1: Radial Tire Output of Chinese Factories of Top 10 Enterprises in 2017 

Among it, the enterprises ranking top 10 in output are: Zhongce Rubber, Giti Tire, Linglong Tire, Sailun Jinyu, Shandong Haohua, Shandong Hengfeng, Triangle Tire, Shandong Yongfeng, Wanli Tire and Doublestar Group. The radial tire output of 10 enterprises accounts for 58.4% of total radial tire output of 48 enterprises, which decreases by 2.5% compared with that in last year.

In 2017, with the radial tire output surpassing that of Giti Tire, Zhongce Rubber rose to be 1st from 2nd in ranking; with the output slightly lowered than that in last year, Giti Tire ranked 2nd; Weifang Yuelong fell to be 12th from 7th; Shandong Yongfeng rose to be 8th from 11th.

3. Production Conditions of All-steel Tires

Among 57 enterprises, there are 37 production enterprises of all-steel tires, which increases by 3 compared with that in last year; in 2017, the total capacity of all-steel tires was 143 million units, the total output was 118 million units, and the average capacity utilization rate was 82.5%, which lowered by 1.7% compared with that in last year.

Fig. 2: All-steel Tire Output of Chinese Factories of Top 10 Enterprises in 2017 

Among it, the enterprises ranking top 10 in output are: Zhongce Rubber, Linglong Tire, Shandong Hengfeng, Doublecoin Rubber, Shandong Haohua, Giti Tire, Triangle Tire, Doublestar Group, Aeolus Tire and Xingyuan Tire.

With a large growth in the output, Linglong Tire, Shandong Hengfeng and Shandong Haohua rose to be 2nd, 3rd and 5th from 4th, 7th and 14th respectively; with a large decline in output, Aeolus Tire fell to be 9th from 2nd.

The all-steel tire output of 10 enterprises accounts for 58.74% of total all-steel tire output of 37 enterprises, which is basically at with that in last year.

In 2017, with the operation rate declining by 1.7% compared with that in last year, all-steel tires had a fair market performance.

On one hand, in July 2016, the nation published new standard Limits of Dimensions, Axle Load and Masses for Motor Vehicles, Trailers and Combination Vehicles (GB1589-2016) and subsequently carried out special actions such as control of excessive load limit and special rectification of illegal modification of trucks, which resulted in that a large amount of heavy trucks greeted the demand of replacement, this bull started from the fourth quarter of 2016 and extended to the truck tire market in 2017.

According to the market survey report of five raw materials enterprises, Sennics, BEKAERT, ExonMobil, CABOT and Sri Trang Agro, after new national standard was implemented, in 2017, the total demand for truck tires rose, however, along with appearance of control of excessive load effect, the replacement cycle of tires is constantly extended, in 2018, the total demand for tires will be in a downtrend.

On the other hand, in February 2017, the United States International Trade Commission (ITC) voted to identify that China’s export of truck and bus tires did not cause substantial damage and potential damage to the American industry. Therefore, in 2017, China’s export of truck and bus tires to the United States was basically not obviously affected.

In August 2017, the European Commission announced to initiate anti-dumping investigation on China’s new tires and retreaded tires for trucks and buses; and then in October, it announced to initiate anti-subsidy investigation. However, since the time of initial ruling and nal ruling of “double anti” of the European Commission was all in 2018, China’s export of truck and bus tires to the European Union was not greatly affected in 2017.

In 2017, the export volume of China’s truck and bus tires increased by 1.7% and the export amount increased by 10.8%; the export volume to the United States declined by 5.6% and the export amount increased by 4%.

4. Production Conditions of Semi-steel Tires

According to the statistics of this year, there are 34 production enterprises of semi-steel tires, which increases by 3 compared with that in last year; in 2017, the total capacity of semi-steel tires was 445 million units, the total output was 329 million units, and the average capacity utilization rate was 73.9%, which lowered by 8.8% compared with that in last year.

Fig. 3: Semi-steel Tire Output of Chinese Factories of Top 10 Enterprises in 2017 

Among it, the enterprises ranking top 10 in output are: Giti Tire, Linglong Tire, Zhongce Rubber, Sailun Jinyu, Shandong Haohua, Shandong Hengfeng, Triangle Tire, Shandong Yongfeng, Wanli Tire and Weifang Yuelong.

Xiamen CST ranked 2nd in semi-steel tire output in 2016, however, it did not report the data for special reason in this year, therefore it did not appear in the list of top 10 enterprises. Triangle Tire is newly added in this year to be 7th; Shandong Yongfeng rose to be 8th from 11th; and Weifang Yuelong fell to be 10th from 7th.

The semi-steel tire output of 10 enterprises accounts for 61.7% of total semi-steel tire output of 34 enterprises.

5. Production Conditions of OTR

There are 24 enterprises producing OTR (including a part of special tires and military tires) participating in the ranking in this year, whose total capacity is 5.5977 million units, total output is 3.1345 million units and average capacity utilization rate is 56%, with a decrease of 11.82% compared with that in last year.

It can be seen from the above data that in 2017, both radial tire (including all-steel tire and semi-steel tire) and OTR slightly declined in operation rate compared with that in last year, in which, the all-steel tire had the least decline while the other tires had a large decline. The operation rate of China’s tire enterprises in 2016 was better than that in 2015 and 2017.

Ⅴ. Conclusion

Development trend of China’s tire industry in the future:

Firstly, structural adjustment and industrial consolidation are imperative, the merger and reorganization as well as elimination of outdated capacity of the enterprises are accelerated, the gap between brands will be widened and the resources will flow to the superior enterprises;

Secondly, the pace of the tire enterprises’ going out will be quickened, and the international progress will speed up;

Thirdly, the situation of domestic and overseas market faced by the enterprises will become more complex and changing, therefore the tire enterprises need to enhance brand construction and strengthen their own core competitiveness;

Fourthly, the application of intelligent technology will become wider and wider, intelligentization will be utilized to improve the quality of tire products, lower the production cost and raise the production efficiency;

Fifthly, more new materials and new technologies will be applied to tire production.