Beijing (Mar. 28, 2012) – China's rubber industry faces seven challenges, according to a speech by Fan Rende, president of the China Rubber Industries Association, speaking at the CRIA's annual meeting in Qingdao last week.

The key challenges are the need to restructure and consolidate tyre manufacturing capacity in China. It will be easier to build strong brands with a few larger tyre makers, rather than many smaller ones, said Fan.

Costs of energy, materials and other inputs have increased, leading to a reduction in efficiency and profits.

Insufficient technical expertise in tyre industry personnel, specifically in terms of rubber knowledge and in innovation. Fan said it is essential for China to develop a national tyre proving ground and to develop fuel-efficient tyre technology. He pointed to the proportion of revenues spent on R&D at Chinese tyre makers and compared it with the proportions spent by the big-name brands from western nations.

China needs to develop strong brand names in the tyre segment. Strong brands from international tyre makers command much higher prices both in China and in overseas markets, he said.

Tyre labelling laws are emerging in many countries, and Chinese tyre makers need to respond to the challenge with tyres which deliver high performance in wet grip, fuel efficiency and other parameters.

Trade friction is increasing. Fan pointed to the United States in this respect, claiming that the US presidential election is exacerbating trade friction.

Manufacturing quality needs to improve in China as China implements a recall system similar to those in western nations.