Tire producers increase R&D investment

Tireworld.com.cn has received a report on leading global tire producers’ investment in R&D.

Michelin, Continental, Pirelli, Bridgestone and Yokohama have all increased their expenses on R&D. Continental’s R&D expense rose 12.9%.

Statistics show that the R&D expenses of the top 8 tire producers across the globe accounted for about 2.2%-3.4% of their sales revenues.

Michelin and Pirelli’s inputs in R&D took up 3.3%-3.4% of their sales revenues, higher than their counterparts.

Tire producers have their own investment models and arrangement in terms of R&D investment, which usually link with the sales revenue, and 3% is a benchmark.

Following are the R&D expenses of leading tire producers in 2014-2015.

The R&D investments of Bridgestone and Michelin reached 776 million and 689 million euros in 2015.

Comparing with those firms, the R&D investments of most domestic tire producers are much smaller.

In Shandong, China’s largest tire producing area, only a few large tire producers’ R&D investments account for 2%-3% of their sales revenues, and there is huge gap between their actual investment amounts with the world’s first class producers.

In 2014, the R&D investment of Qingdao Doublestar, Sailun Jinyu Group, and Double Coin were 108 million yuan, 226 million yuan, and 318 million yuan, respectively, accounting for 2.69%, 2.03%, and 2.15% of their sales revenues.

In 2015, the R&D investment of Sailun Jinyu Group was 286 million yuan and accounted for 2.9% of its sales revenue; while that of Qingdao Doublestar was 104 million yuan and accounted for 2.6% of its sales income.

Analysts reckon that as the R&D investment could be huge and is hard to be rewarded in the short term, most domestic small- and medium-sized producers are reluctant to invest their capital in it. As a result, their products are mostly low-end and such producers lack of sustainability.

According to an industry expert, technical investment is necessary for long-term development, or the producers won’t have great achievement.