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CHINESE TYRES
Michelin has reduced production facilities, output and staff employed, whilst strategies put in place by Continental has seen a contraction of business in the German market, at least, as former Conti retread partners found their Conti business withdrawn to Hamburg.
There is an analogy with the high street. Across Europe there are empty shops in what were once bustling city streets. Traditional quality shops have been replaced with low end stores swamped with Chinese produce. From household goods through clothing to
electronic goods and furniture, the market is dominated by cheap shops selling cheap Chinese goods, usually at the expense of the mid- range quality sector and the traditional retailers. The high end is less impacted by these imports as the purchasers are less financially challenged – more likely to buy in Harrods than Lidl...
SL: Because it is still in investigation phase, the manufacturers are just continuing their current plan. Tariffs or trade barriers are always only short term. Good products, operational efficiency, brand building and investments for
the future are more fundamental and should get management focused rather than short term trade issues.
RB: How do they plan to compete in Europe in the light of the proposed tariffs?
SL: The only way
to compete is to
go back to the
basics of the
business. You can
see the videos on
YouTube. Sentury
and Doublestar
have some of the
most automated factories in the world, so this can help them to keep the costs down in order to compete. In the meantime, the quality of the products is really improving. Sentury’s product line in aviation includes the main landing gear tyre for the Boeing 737-700/800/900 aircraft certified under US’s FAA technical standard. And Giti has started providing tyres to Formula 3 racing. Those are good demonstrations of quality.
RB: Will there now be a change of geographical emphasis in the manufacturers marketing?
SL: Most Chinese manufacturers have global ambitions, and they
SL: I am not an international trade expert, but as a business manager, we can only follow the local law and regulations. There is no agreement or disagreement. We view it as a business problem which we come across pretty much ever y day. Chinese manufacturers are focused on growth. If there is demand for tyres anywhere in the world, they
plan to go to every market. However, the current trend is that the Asia/Pacific region is projected to achieve rapid gains in tyre sales, particularly China, India, Indonesia, and Thailand. The Africa/Middle East region and Central and South America will post above average gains in demand. North America and Western Europe will only post meagre gains of only about one percent annually through 2019. However, Chinese manufacturers seen the value of a global brand. The rest of the world is looking up to US and Western European markets for brand recognition. Furthermore, there are so many segments in the tyre market. This time the EU is trying to post tariffs on Chinese truck tyres, so you can see they are really competitive in the market place. The manufacturers are seeing this and would invest in marketing to
will work ever y hard to even the conditions are Of course, they will tr y diversify their customer
RB: What do they plan about it?
satisfy it tougher. to
bases too.
to do
the
CITExpo’s Sam Lai gives an insight into how Chinese manufacturers see the global market
The Impact on the Registration of Chinese Truck Tyre Imports into the EU on the Chinese Tyre Industry
Following the recent EU announcement that imports of new and retreaded tyres for buses or lorries originating in the People’s Republic of China are to be subject to registration, we thought we would try and get the views of the Chinese tyre industr y on the legiSL:ation. Not surprisingly, it is not easy to persuade the Chinese new tyre manufacturers to go on record with regards to subjects such as this, so we asked Sam Lai, the Marketing Manager of Reliable International Exhibition Services Ltd, the organisers of the prominent Chinese trade show CITExpo to talk to the Chinese manufacturers on our behalf to get their views on the matter, and how they plan to approach the market in the future. What follows is an amalgamation of various manufacturers’ views and Sam’s own thoughts on the
subject. It makes for interesting reading.
Retreading Business:
What has been the impact on sales to Europe of truck tyres since the registration ruling was announced?
Sam Lai: From what I hear from our manufacturers, the impact is still minimal at the moment. Both Chinese manufacturers and their European importers are in the wait and see mode. They are focusing on the execution on the current and short-term demands. They are trying to follow a policy of “business as usual.”
RB: There are some that say the imposition of tariffs is one thing, but the move to register imports BEFORE the ruling has been made is anti-competitive. Do the Chinese manufacturers agree?
further improve their market position.
RB: Will the tariffs change the way Chinese manufacturers market their products to Europe?
SL: It will make them more careful and specific, like the truck tyre example. I think if the European media can provide ver y specific and cost-effective solutions to Chinese manufacturers, they will be ver y much welcomed. Also, Google and Facebook have really disrupted the advertisement market, so results that can be proven and are cost-effective, both online and offline, will be the way to go. However, this information
24 Retreading Business