Financial crisis affects the global tire industry

The global tire industry has been dragged down by the downstream auto industry and it has also been caught in a “stricken area”. According to statistics, under the impact of the financial crisis this year, the demand for tires in most parts of the world has dropped drastically. The history of the two major markets, the original and the aftermarket, has been at the same time sluggish. Many tire companies have reduced their production, and projects for expansion and construction are being cautious. The original and after-sales markets both slumped.

The rubber tire industry is heavily influenced by the financial crisis. The biggest feature exhibited by the rubber tire industry this year is the surprising decline in sales of the original and aftermarket tires. In general, when the original tire market is sluggish, the aftermarket tire market will thrive, and vice versa, as this year's two major markets at the same time sluggish phenomenon is rare in the tire industry.

The reduction in the production of automobile manufacturers and the deterioration of the economy of the people’s homes have led to a decrease in driving mileage and a decrease in tire replacement rates. The relevant financial statements show that Goodyear's third-quarter tire sales decreased by 12.4%; Bridgestone also decreased its sales volume in the first nine months of this year. Lead to a substantial decline in net profit.

In the extremely depressed tire market environment, all tire companies around the world are trying their best to reduce their inventory. They have adopted countermeasures to “adjust the production plan according to market demand”, reduce production and production, and even stop production. It is understood that nearly 90% of tire distributors in North America that have been employed for less than five years have closed down or are on the verge of collapse. Even the tire companies ranked in the top 10 in the world had to do the same.

Michelin Tire North America announced that it will begin to compress production from November 1. Production of passenger tires and light truck tires at three tire factories in Indiana and Alabama will stop production for eight weeks, and layoffs will be about 40% (about 1,500). . Bridgestone Firestone Company said in its speech that the company has taken measures to implement the decision on “according to sales and production.” Some of the company's plants have extended their production stoppages, and some plants have reduced their daily production and cancelled overtime. The company is paying close attention to market changes, continuously assessing the market, and making further and necessary adjustments at any time. Goodyear Rubber Tire's tire factory in North America has also adopted a variety of methods to produce. Its 3 car tyre production plants have been shut down since August and officially closed at the end of October. In addition, the 4th car tyre factory has been shut down from Sunday to late October. The company has 2 factories that will be temporary in terms of radial tires. Stop production until next year. The expansion and construction projects are cautious and cautioned by many tire manufacturers; the tire expansion plan will be revisited due to the global economic slowdown.

Michelin Tire North America has made a decision in August to cancel plans to build a new tire plant in Mexico based on the continued downturn in the North American market; Toyo Tire North America plans to postpone the construction of the US 'White Tire Plant expansion project by 6 to 12 After the completion of the month, the project was originally scheduled to be completed by the end of 2010; Cooper Tire & Rubber Company formed a special working group to carry out economic census on the company’s existing US production capacity. After 90 days to complete the above work, the company stated that The contraction will be expanded. The recent adjustment is to close at least one US tire factory. The medium and long-term goal is to gradually shift more production capacity to countries or regions with low labor costs, and change the current situation in which 75% of production capacity is concentrated in the United States.

The general decline in the income of dry-bread business also constrains the investment capacity and enthusiasm of new projects. Some experts predict that if global tire sales in 2008 grew by less than 4%, the global tire industry will enter a new round of consolidation after five years of rapid development, indicating that "the winter season has arrived." Therefore, in the current financial turmoil, the economic outlook is uncertain, the tire industry expansion and new projects are cautious.

Although the global tire industry has cut production and production everywhere, not everything is declining. The market for agricultural and off-highway (OTR) tires remains strong and the aviation tire production line continues to operate at full capacity. So far, the world's major OTR tire manufacturers are optimistic about the market prospects. Companies such as Titian, Bridgestone, and Michelin will continue to build at full capacity and accelerate expansion in the OTR space.

China's exports need new directions

The biggest victims of the financial crisis are often emerging-market countries, especially those that have stimulated economic development through exports. In recent years, Chinese tires have formed a pattern in which nearly 40% of the products are exported every year. This subprime mortgage loan in the United States is a major test for the Chinese tire industry and is also a new challenge and opportunity.

The alarming growth rate of the Chinese tire industry is driven by the growing demand for "Made in China" tires in the international market, especially in North America. According to statistics of 34 domestically owned tire companies of China Rubber Industry Association Tire Branch, the export volume of radial tires in 2007 increased by 52.2% over the previous year. In recent years, the rapid development of Asian economies, led by China, has stimulated the sales of automobiles in emerging markets in China and India, and the rapid growth of exports from western countries to tire manufacturers in the region has made the Asia-centered Asian region a hot spot for the world’s tire industry. Tire manufacturing center.

However, the impact of the subprime crisis on China's tire industry has already appeared, and China's tire exports have fallen sharply. According to the statistics of China National Rubber Industry Association Tire Branch, the export volume of tires in July, August and September this year showed a declining trend compared with the previous year. Tire branch statistics also show that in September this year, 14 tire companies have suffered losses, the loss reached 33.3%, and finished goods inventory reached a record 42.3%, which is obviously a sign of excess capacity.

Faced with the rapid changes in the economic environment at home and abroad, some tire companies will inevitably be eliminated due to their inability to adapt. Only by taking advantage of the opportunities for transformation, upgrading, and innovation will it be possible for companies to settle the crisis. Increasing brand building, accelerating technological innovation, and increasing product added value will become the consensus of most companies.

Finding emerging markets has also become a “cold” way for tire companies. With the declining trend of European and American markets, the new direction of “Made in China” to the world will gradually shift to emerging markets represented by countries and regions such as South America, the Middle East, Russia, Africa, and ASEAN.