Metallurgy / Chemicals / Rubber & Plastics

Starting in the second half of 2021, the tire business will become more and more difficult. The circle of friends of people who flip tires is almost all price reduction information such as "fire sales" and "promotions" - it seems that the price increase in the first 8 months is related to the existence of the market. in two parallel worlds. Did the tire factory increase the price? Up! But the sale is bigger than the price hike! One of the important reasons for such a "contradictory" situation is the "consumption downgrade" of car owners.

Even in the more brand-conscious passenger car tire market, owners are beginning to increase the weight of price in their choices. In our interview with the tire shop, a tire shop owner mentioned this!

The consumption of overseas tire companies has declined

The "consumption downgrade" described by tire shop owners has a terrible overlap with some of the data in foreign financial reports. In fact, even the leading tire companies encountered a rare "Waterloo" in the Chinese tire market in the first half of this year. In the first half of this year, the tire sales of leading tire companies in the Chinese market fell by more than 10%. In addition, the Eastern European market The decline in sales has dragged tire sales of tire companies to a year-on-year decline of 2.2% in the first half of the year.

Regarding the decline in sales, tire companies said that they were more affected by the disruption of the global supply chain and increased inflation. When the tire market demand was lower than expected, the decline in sales was also reasonable. In the European and American markets, although sales have experienced a substantial increase, in terms of global sales, passenger car sales have not returned to the normal level in 2019. This also means that although the international tire trade market is recovering, the speed of recovery is far from enough. After all, the price increases brought about by inflation have many car owners considering cheaper alternatives. "Cost-effective" is repeatedly mentioned by the tire market again.

The domestic tires, which have always been supported by "high cost performance", seem to have enjoyed this wave of benefits, at least in overseas markets, their sales have gradually improved.

Good sales and high profits in overseas markets

The semi-annual report shows that the international trade sales profits of many tire companies have reached more than 10% (some companies have increased their overseas production capacity costs by 90%), and some companies have made profits when their overseas production capacity is started-a sharp contrast to domestic tire sales in the first half of the year. contrast. Especially in the North American market, Chinese tires returned to the fourth place in the import list of China truck tires, and the sales volume increased by about 50% compared with the same period last year. Whether it is sales volume or profit, the international trade market performed better in the first 6 months of this year!

The reason is that it is still cheap. According to the tire price statistics in the North American market, the price of tires made in China is still very cost-effective. Under the soaring prices caused by inflation, the cost-effective Chinese tires are naturally affected. The favorite of car owners after "consumption downgrade". If the high inflation rate continues until the end of the year, it is expected that the international trade export sales of "high cost performance" tires will remain unabated in the second half of the year. However, it should be noted that the "prosperity" of Chinese tires in the international trade market this year means that it has given up competition in the high-end market. In fact, a number of tire companies have begun to deploy in the domestic ultra-high-performance tire field - from the original equipment to the replacement market to compete with foreign leading brands! Improve your competitiveness in the high-end market and gain more profit support.

"High cost performance" and more "high value" Chinese tires

In fact, in the current description of "high cost performance", Chinese tires have become more and more "high". High here means high end. First of all, the gap between Chinese tires and global giants in terms of manufacturing process and quality level, as well as product gold content is getting smaller and smaller; in our daily product test, the performance of domestic tires is no less than that of global top brand tire products. Market competitiveness was further strengthened.

On the other hand, the word-of-mouth difference between Chinese tire brands and foreign brands is gradually narrowing, and consumer recognition and acceptance are also gradually improving. Like most global tire giants, Chinese tire companies are gradually divesting low-end production capacity. Let the "high cost performance" of my country's tire products no longer simply refer to "the price is so low that it makes people happy", but the performance of "high value" products makes people thumbs up!

Judging from the current capacity planning of listed tire companies, my country's top tire companies have begun to plan domestic high-end tire production capacity to replace the high value-added tires exported by foreign tire giants to my country, to meet the domestic market's demand for high-value tires and meet car owners' demand for price And multiple needs in terms of performance control!