With the "price war" in the low-end tire market white-hot, there are Lu companies to embark on the road of high-end differentiation, can pick and choose orders, and the need to order the rush of the company in contrast.

“Since last year, our radial tires have always been orders and other capacity. In the first quarter of this year, the export of semi-steel radial tires has increased by 5% year-on-year.” The 5th China Guangrao International Rubber Tire was held on May 15-17, 2014. At the auto parts exhibition, Lin Jie, manager of Shandong Jinyu Tire Technology Co., Ltd.'s foreign trade department, told reporters that in most small and medium-sized rubber tire companies, the operating rate is only 70% of Guangrao, and Jinyu Tire is operating at full capacity and at full capacity.

sharp contrast

The exhibition on that day attracted 610 exhibitors from more than 40 countries and regions, including 250 tire companies. Among the global top 75 tire companies, 37 companies including Goodyear, China, and Cooper have come to Shandong Nuggets.

With skillful English, Lin Jie exchanged ideas with foreign companies who had come to negotiate with each other.

"After years of development, Jinyu Tire's brand awareness has increased. At present, more than 70% of its products are exported to more than 100 countries and regions in the form of independent brands." Lin Jie told reporters that Jinyu tire products are mainly exported to foreign countries to replace Market-based. Last year, it produced 12 million semi-steel radial tires and 80% of exports; 3 million all-steel radial tires and 30% of exports. At present, it has reached cooperation with domestic automobile brands Jianghuai and FAW Hafei, and is cooperating with BYD and Geely to allow Jinyu tire products to enter the automobile.

According to Lin Jie, in 2013, twice the orders were waiting for production capacity, and these orders were retained after they were selected. "Some orders next have economic benefits in the short term, but in the long term there is no benefit to building a tire brand. For brand development, it will not kill chickens and take eggs."

Qu Jianying, manager of TBR International Trade Department of Shandong Yongsheng Rubber Group Co., Ltd., said in an interview with reporters that the company is currently in full production, while the price of tire products has fallen by 20% due to the declining price of natural rubber since 2013, and customers have a strong wait-and-see attitude. The year-on-year sales are also falling.

An interview with the reporter found that at the exhibition, companies that were in urgent need of order rush due to severe overcapacity were in stark contrast to those who picked and picked orders. "The majority of tire companies in Guangrao only 70% operating rate, the company forced by inventory pressure had to reduce production costs, eager to attract orders through the show." Guangrao Bureau of Li Bureau deputy director of the introduction.

High-end differentiation

It is understood that Guangrao, Shandong's main production area for rubber tires, has a production capacity of 150 million radial tires in 2013, accounting for more than 25% of the country's total and more than 50% of the province; rubber tire industry has achieved an industrial output value of 101.5 billion yuan. 13.2 billion yuan, a year-on-year increase of 27.3% and 28.4% respectively. Among them, exports achieved US$3.378 billion, accounting for 89.6% of the county's total exports, which represented a year-on-year increase of 15%, accounting for 39.2% of the province's total tire exports.

In the first quarter of 2014, Shandong rubber tire industry still maintained rapid growth. The added value of the rubber industry in the province grew by 15.3% in the first quarter, and the key tire enterprises grew rapidly. The tire production in the province grew by 17.8%, of which the radial tires increased by 32.6%. The production value of triangular tires and exquisite rubber all increased by more than 10%.

But the good-looking numbers still cannot hide the excess reality of the entire rubber tire industry. Statistics from the Shandong Rubber Industry Association show that in 2013, sales revenue and profits of enterprises above designated size in Shandong increased by 15% and 19.3% year-on-year, but the growth rate dropped by 8.8 and 10.3 percentage points respectively.

“Tyre prices have fallen by 30% since last year, and the capacity utilization rate of the rubber tire industry is only 64.5%. The tire market is increasingly relying on price competition.” Zhang Hongmin, chairman of the Rubber Industry Association of Shandong Province, said that the tire industry has become a solution to excess capacity in Shandong. One of the seven industries.

Zhong Wenfeng, who is responsible for the reception of the show, also stated that in recent years, Guangrao's new radial tire project has mostly been low-level duplicated construction, and the homogeneity of products has been relatively high, which has led to the problem of structural excess of Guangrao tire products.

Lin Jie told reporters that with the "price war" in the low-end tire market entering the white-hot, tire companies should upgrade production technology as soon as possible, into the automotive industry. To this end, Jinyu Group has built the nation’s first MES intelligent drive platform.

The reporter also learned that Yongtai Tire plans to purchase R&D equipment such as tire pressure analysis machines, relying on the sales channels of Copley Company in the United Kingdom to provide tire support for high-end vehicles such as Land Rover and BMW, and plans to invest 40 million yuan in a new cryogenic process. Glue lines, product performance indicators can be increased by 15%.

“The continuing low price of natural rubber is not favorable to the rubber products industry. One of the important reasons is that product homogeneity is serious and price competition is fierce. Only by establishing a reasonable upstream and downstream price industrial chain is the path to achieving common sustainable development.” Deng Yachen, president of the China Rubber Industry Association of the day, said.

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