DALIAN, China (Dec. 19, 2001)—Goodyear plans to invest $120 million to nearly triple production capacity for passenger tires by year-end 2006 at its tire plant in Dalian, including an emphasis on performance tires. Goodyear also plans to expand the number of affiliated retail stores in China by nearly a third, to 2,100, by 2005.
Goodyear Dalian supplies high performance radials to several car makers in China, including local subsidiaries of Volkswagen A.G. and its Audi subsidiary, General Motors Corp., and France's Peugeot-Citroen S.A. The performance market in China is largely H-rated, a spokesman said, but demand for V- and higher rated tires, as well as for tires for four-wheel-drive vehicles, is growing as well.
Capacity at the Dalian plant, which Goodyear took over in 1994, will rise to 5.3 million units a year from 1.9 million, the company said. Employment will double to 1,000 workers by 2006. The size will be expanded by an as-yet-undetermined amount, the spokesman said.
“Goodyear is well poised to continue its growth in the China market, which is clearly destined to be one of the world´s biggest long-term business opportunities,” said Hugh Pace, president of Goodyear Asia, in a prepared statement.
Included in the retail store expansion is growth of premium “Eagle Store” format outlets, which offer a variety of automotive services along with tires.
Goodyear's minority partner in the venture is Dalian Rubber General Factory. Goodyear's ownership is still being contested by China Enterprises Ltd., which is pursuing a $3.5 billion lawsuit that accuses Goodyear of racketeering and and trade libel in its dealings in 1994 with Dalian.