BEIJING (Jan. 3, 2012) — China's tire makers are not optimistic about the coming year, according to a Chinese-language report on the website of the China Rubber Industry Association (CRIA).
Zhang Wanyou, vice general manager at Double Coin Holdings Ltd., said 2012 “may be more difficult than this year (2011), the situation is more complex. Companies are likely either to reduce the operating rate, or cut stocks. The pain now may last two to three years.”
Ni Jie, general manager of tire sales at Hangzhou Zhongce Rubber Co. Ltd., said on the CRIA website that “2012 will be a very challenging year. The growth rate of domestic car production and sales are dropping. Little growth in tire demand, but production has increased dramatically, caused by the billions in investment boost to the tire industry in 2009.”
At China's tire factories that previously made up to 5 million units a year, he said that now 20 million a year is not unheard of, leading to overcapacity.
Fu Xiangdong, deputy general manager of Guangzhou South China Rubber Tire Co. Ltd., said the European Union tire labeling laws will affect demand significantly from EU consumers. Also, reduced sales of winter tires in Europe due to mild weather means there is a lot of stock and cash tied up in the supply chain. He said his company is not optimistic about exports to Europe.
Lifa Rong, vice president of Triangle Tyre Co. Ltd., said the wave of environment-related legislation is an inevitable trend and Chinese manufacturers must respond aggressively to this new trend.
This report appeared on the website of European Rubber Journal, a U.K.-based sister publication of Tire Business.