As is well known, tire manufacturing has the "three highs", and the tire industry is a high energy consumption, high pollution, and high emission industry. In addition, the "three highs" we are going to talk about today refer to the high-tech, high demand, and high added value facing this trillion level tire market. These "three highs" will inevitably bring opportunities and challenges to the development of Chinese tires.
High technology of tire products
With the increasing demand for tire performance in the modernization of automobiles, tires are developing towards high-tech and refined products. Due to the increasing popularity of economical, sporty, and environmentally friendly vehicles, energy-saving, comfortable, and low tire noise tires have become the mainstream in the development of automotive tires. The proportion of multifunctional tires such as anti slip, low rolling resistance, and high performance in tire performance is constantly increasing. The structural design and formula of many tires are constantly updated and improved to adapt to the changes in the automotive market and the requirements of low-carbon and environmental protection, which puts forward higher technical requirements for tire manufacturing.
High demand in the tire market
In April 2023, the prosperity index of China's logistics industry was 53.80, a year-on-year increase of 22.83%. The freight volume in April was 4.723 billion tons, a month on month increase of 21.29%, and a year-on-year increase of 11.20%. During the May Day holiday, the logistics value index reached its peak, with the highway logistics price index related to all steel tires and heavy trucks reaching 1025.62 in the week of May 3, the highest value since the same period in five years since 2018. With the continuous recovery of domestic economic activities, the transportation demand for goods has significantly increased, which will directly benefit the demand for all steel tire replacement market. The demand for semi-steel tires in the overseas market gradually rebounded in the fourth quarter of 2022.
With the continuous dissipation of unfavorable factors such as the epidemic, the flow of people and goods in various parts of China has returned to normal. Driven by strong rebound momentum, the demand for tire replacement market is gradually increasing. In addition, the upgrading and replacement speed of car tires, represented by sedan tires, is constantly accelerating, shortening from the past 3-5 years to 1-2 years. From this, it can be seen that there is broad market space for high-performance new tire products in the tire replacement market.
High added value of tires
People's demand for vehicle tires is no longer limited to wear resistance and high mileage. Consumers are increasingly paying attention to HVA (High value added) high value tires. Many foreign tire brands, including Michelin, Pirelli, and Goodyear, attach great importance to the field of high value-added tires and use these tires as an effective way to increase revenue and profit.
According to the 2022 third quarter financial report released by Hantai, the sales of 18 inch and above passenger tires accounted for 41.1%, a year-on-year increase of 4.7%. Large size and high value-added new energy products have become the main profit points for Hantai tires. In the first quarter of 2023, Hantai stated that it will continue to explore the high-end market and continuously increase the proportion of high value-added products in the products sold; In addition, Ukohaoma stated that one of the reasons for the sales growth in the first quarter of 2023 was the successful marketing of high value-added tire products, such as its Advan high-performance tires and Geolandar tires for SUVs and pickup trucks, as well as the improvement of its product portfolio; Bridgestone stated that China is a key deployment area for its high-end strategy. In order to establish its core business capabilities in China, Bridgestone is strengthening the proportion of high value-added products in its tire business and steadily promoting HRD tires.
With the increasing demand for tires. High value-added tires can improve the quality and performance of tires, increase brand awareness and market share, thereby attracting more consumers, increasing user stickiness and brand loyalty. High value-added tires will become one of the future development directions of the domestic and foreign tire markets.
The Future of Chinese Tyres
Driven by high demand, China's tire industry still has great potential in the production of high-tech and high value-added tires, with great development space. With the continuous improvement of the technical level of domestic tire manufacturers and the rapid development of China's automotive industry, the Chinese tire industry can gradually occupy the commanding heights of the tire market and meet the pinnacle of foreign tire giants by researching and developing flat, low noise, low rolling resistance comfortable, green, high-performance tires and various scarce categories in segmented markets.
As far as the current situation is concerned, with the promotion of the 10-year action program "Made in China 2025" and the "Double Carbon" strategy of China's first power strategy, China's tire industry, represented by green intelligent manufacturing, is in full swing. The green content of the tire industry is urgent. The research and development of high-performance and green tires is a necessary path for Chinese tire companies to enter the high-end field. The development of new energy may be an opportunity for Chinese tires to overtake on curves!
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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