Japanese Tire Companies Expand Capacity Amid US Probe into Chinese Tires

While the Chinese tire companies face headwinds and run under capacity, their Japanesecounterparts expand the output one after another.

Recently, Yokohama Tire Corp. announced to expand large-size tire output in a plant inAichi prefecture. The company plans to develop the new production line in May and put it into operation in June before running at full capacity by April 2018.

After the expansion, the plant’s annual capacity for large-size tires is expected to increase by some 20 percent.

Tire giant Bridgestone is also busy expanding capacity. Since the beginning of 2016, it hasannounced to expand tire capacity in Russia, Canada and the United States.

It planned to invest some 2.07 billion yuan in a new passenger tire plant in Russia, 1.65 billion yuan in a plant in Canada and 1.1 billion yuan in a plant in North Carolina, the U.S..

Meanwhile, Sumitomo Rubber and Toyo Tires also have plans to expand output.

China is the world’s largest tire producer and the U.S. is the world’s largest tireconsumer market. Both China and Japan are U.S.’s major tire trading partners.

Since the U.S. started antidumping and countervailing investigations into Chinese tires, the U.S. semi-steel tire imports from China have fallen by over 50 percent.

The gap is then filled by other Asian tire producers that enjoy lower costs.

Statistics indicate that the U.S. imports of light truck tires from Japan registered double digit growths in 2015 while its imports from China declined by 3 million units.

The U.S. current antidumping and countervailing investigations into Chinese truck/bus tires serve as a good opportunity for tire companies in other countries and regions.

In this context, it is not difficult to understand why the Japanese tire manufacturers expand their capacity.