On March 28, 2023, the well-known company BYD released its 2022 annual report - with a total sales of 1.8635 million new energy vehicles for the year, it bravely won the first place in global new energy vehicle sales and surpassed Tesla, the leader in the field of new energy vehicles.
The motivation for BYD to win the "sales crown" is not only in the Chinese automotive industry, but also in the automotive aftermarket with a scale of over a trillion yuan. As the most important component of automobiles, will there be companies like BYD in the future that will surpass the industry's three giants Michelin, Bridgestone, and Goodyear?
In 2022, BYD was able to overtake Tesla thanks to its faster sales growth ability than Tesla. In 2022, Tesla's total revenue was 51.35% year-on-year, while BYD's total revenue growth rate reached 96.2%, almost double that of Tesla.
A faster growth rate means a higher market supply capacity - meeting market demand faster is the key to capturing more market opportunities. This is also why since 2021, tire companies have increased their production capacity layout, and a larger "tonnage" has ensured a continuous supply capacity in the market.
Therefore, in 2022, under the logistics and energy crisis of European and American tire factories, many large-scale Chinese tire enterprises will bear the "burden" of global tire market supply. Due to the significant growth of the export market, the operating revenue of domestic tire enterprises has significantly improved.
As of now, from the announcements of tire companies that have already disclosed their financial and pre financial reports, Sen Qilin has shown a more prominent growth rate, with a year-on-year increase of 21.53% compared to 2021. Even in the performance of global tire companies, this growth rate is also commendable. The constantly expanding tire production capacity layout and expanding product matrix have led to rapid growth for Senqilin.
Of course, this is also the development path that domestic tire companies have been following in the past two years. From the accelerated promotion of Linglong Tire's "7+5" strategy, to the continued expansion of Sailun Tire's overseas base construction, and to the release of a prospectus by China Strategic in January 2023 to raise 7 billion yuan for project construction, domestic tire giants are constantly increasing their product supply scale to support rapid sales growth.
However, based on the average growth rate of the tire industry in 2022, domestic enterprises need to grow at least 19% faster to become the fast-growing "BYD". If calculated based on the sales disclosed by the domestic tire giant Zhongce, the sales growth of domestic tire enterprises should be maintained at least 5 billion yuan. At present, Chinese tire companies with this potential are still concentrated among the three giants of Zhongce, Linglong, and Sailun.
Of course, BYD's rapid growth in sales is inseparable from its rapid growth in sales of automotive related products - in 2022, BYD's revenue from automotive and related products increased by 151.78% year-on-year. According to public information, the installed capacity of BYD's new energy vehicle power and energy storage batteries reached 89.836GWh in 2022; As the sales of new energy vehicles continue to rise in 2023, it is expected that the total installed capacity will reach over 40% this year.
The high production and sales of cars and the installed capacity of batteries have provided BYD's supercar giant with "dual insurance". This also means that potential 'BYD' players in the Chinese tire industry also need to do a dual guarantee for themselves if they want to catch up with giants such as Michelin - supporting replacement with both hands!
Especially in the passenger car tire market, the matching share is crucial for expanding the tire market share. Among domestic tire companies, those that can rely on supporting share to boost sales growth are still mostly concentrated among the top domestic tire companies. In the first half of 2022, the three tire companies that can compete with foreign brands in the domestic passenger car market are still Zhongce, Linglong, and Sailun. At the same time, these three tire companies have also surpassed the supporting quantity of tire companies such as Youke Haoma and Tongyiou with their gradually expanding market share in new energy vehicles and domestically produced high-end passenger vehicle accessories - new energy vehicle accessories have played an indispensable role in helping Chinese brands break through.
In 2023, the new energy vehicle market is still developing, which means that domestic tire companies also have more supporting shares and sales growth opportunities - which also means that at least in this segmented market, Chinese tire companies are expected to surpass foreign companies in sales.
Data shows that in 2020 and 2021, Linglong has been ranked first among the original brand of newly launched new energy vehicles in China for two consecutive years. In fact, in the field of new energy vehicle accessories, the sales growth rate of Linglong tires reached 182% in 2021, firmly ranking first in the Chinese tire industry. If this growth rate and supporting share continue to grow, Linglong is likely to become the first "BYD" in the new energy supporting market in the Chinese tire industry.
The supply capacity has been reached, and the number of supporting enterprises has increased. The third factor that determines whether a tire enterprise can become BYD is the most important sales volume. At least from the order meeting in the first quarter of 2023, Zhongce is still "as stable as Mount Tai". According to incomplete statistics, in February 2023, Zhongce had over ten dealer meetings with an order amount of over 10 million yuan, of which at least four had an order amount exceeding 30 million yuan - a monthly order amount of hundreds of millions of yuan. From the perspective of order volume, Zhongce's market share still ranks first in China.
In the field of new energy supporting facilities, Linglong's overall market share has approached 20% - as mentioned earlier, at least in this segmented market, Linglong has shown its potential.
Another good news is that in a recent interview with tire stores in first tier cities, tire stores revealed that since 2020, the share of Chinese tire brands in the domestic replacement market is gradually increasing - in three years, the domestic market share of Chinese tire brands has increased to around 70%. The production capacity of tire enterprises, the trust of supporting enterprises, and the recognition of the end market all tell us that Chinese tire enterprises are overtaking.
However, it should be noted that although Chinese tire companies have made significant progress in terms of sales growth, supporting level, and market share, most tire companies still need to continue to improve their profitability. It should be noted that BYD's net profit increased by 445.86% year-on-year in 2022, but the net profit change of most domestic tire companies is difficult to reach 20%.
Therefore, domestic tire companies not only need to attach importance to high sales growth, but also need to adjust their product structure and make breakthroughs in profitability in order to have more confidence in declaring war on traditional giants in the tire market.
Disclaimer: The image materials and articles on this platform come from the internet, so the copyright belongs to the original author. If any infringement is caused to your copyright and interests, please contact us. We apologize deeply and promptly delete it. Article source: Tire Business
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