Chinese tire industry lifted concentration ratio

Recently, China most listed tire companies have released their third quarter reports. The reports showed tire companies' net growing fast.

However,  their beautiful performance might be just a nine-day wonder after deeply analyzing in their rapid growth. 

Tire manufacturers' net surging

Statistics showed that Sailun Group's net increased 185.29% in the first three quarters of 2018, and Guizhou Tire surged 578.26% at the same period.

Besides, GITI Tire and Linglong Tire realized two digital growth, and Aeolus Tire turned to green.

It seems that China tire companies' profit was getting better this year.

However, Xu Wenying, secretory of China Rubber Association said that there was much inflation on their rapid growth.

Unreal growth

It was not faked datas, Xu said, it was mainly due to low profit statistics in 2017. 

In the first eight months of 2013 - 2015, there were respectively 5.8 billion yuan, 6 billion yuan, 3.5 billion yuan of net profit counted by Tire Association of China Rubber Association. However, it was declined to 1.3 billion yuan in the first eight months of 2017.

Although total net profit came back to 2.6 billion yuan in the same period of this year,  it was far from 2014's 6 billion yuan of historical high.

Eight companies of 31 counted companies showed deficit in 2018, reaching 1.02 billion yuan of deficit. 

Shen Jinrong, chairman of Zhongce Rubber, said domestic tire production kept growth in recent years, but their sales revenue was declining, and profit was further squeezed.

To be noticed that, most profit were concentrated in large-size tire companies. Statistics showed that leading tire companies such as Triangle tire, Linglong Tire, Zhongce Rubber and etc. took 80 percent of total industrial net profit.

Xu Wenying also said that large Chinese tire companies are more and more stronger, which showed that Chinese tire industry concentration was also increased.