Why China’s Tire Exports Grow in Volume but Drop in Value

The latest statistics released by the General Administration of Customs show that in Sept., China’s export of new inflated rubber tires was 37.64 million, up 3.5% year on year, and the export value was 3.84 billion yuan, down 6.3%.

In the first nine months of this year, China’s export of new inflated rubber tires was 354.66 million, up 4.8%, and the export value was 64.09 billion yuan, down 1.4%.

Someone may ask: why the exports grow in volume but drop in value?

It is a common phenomenon appeared over the past few years in China’s tire exports. In the first half of this year, China’s export of all-steel tire was also like that.

China’s Tire Export over the Past Three Years

According to an industry insider, over the past few years, the US launched anti-dumping and anti-subsidy probes against passenger car tires and truck and bus tires from China, while the US is the largest tire export destination of China, therefore, China’s tire export in the future could be really hard.

Therefore, some short-sighted tire companies, the small- and medium-sized in particular, lowered their prices to boost export volume before high tariff rates are imposed.

There are also some companies exploiting the international market by “price war” and relying on meager profits, or even no profit.

Those cases all led to the weird phenomenon of large export volume along with lower export value. In the first half of this year, the phenomenon was particularly acute in all-steel tire exports and were rare in the exports of those were included in the range of the US’s anti-dumping and anti-subsidy tariff.

Take semi-steel tire as an example, its export volume, value and unit price to the US in the first half of this year dropped 31.2%, 39.5% and 12.2%, year on year, with unprecedented decrease rates.

High tariffs of anti-dumping and anti-subsidy blocked the path of exporting with low prices.

China is currently the world’s largest tire producer and the average quality of tires made in China has little difference with the world’s top brands.

But the export prices of tires made in China have been low.

On what basis the US launched the anti-dumping and anti-subsidy probe? It was the import price. Comparing the market price of tires made in China with that of other countries we can see the crux of the issue.