Back of Wang Feng, prospect of Aeolus Tyre still unclear

Aeolus Tyre Co., Ltd. decided early this year to suspend further incorporation with the 90% stake in PTG (Pirelli’s industrial tire business) and with relevant assets of ChemChina Guilin Tire Co., Ltd. But the decision hasn’t been approved at the board’s meeting later.

Aeolus Tyre offered on Mar. 16 a solution, bringing back Wang Feng.

Two years later, Wang Feng’s back

Aeolus Tyre announced Mar. 16 to hire Wang as the general manager and CEO.

An industry insider said he “disappeared” for two years.

Wang resigned the post of board chairman of Aeolus Tyre on Mar. 15, 2016.

At that time, the tire producer was integrating its asset with Pirelli’s, and acquired a 10% stake in PTG.

However, it business didn’t run better in the past two years.

Wang is also watching the tire market.

He said to the public in early 2016 that Aeolus realized the transformation from quantity to quality in the pattern of operation, and turned from a traditional production-oriented manufacturer to a service-oriented manufacturer.

Three burdens right now

What is Wang confronting in 2018.

First, Aeolus lost about 400 million to 500 million yuan last year and it has to manage ChemChina Guilin Tire till Dec. 31, 2020.

Aeolus has most of legislative rights except disposition and usufruct

No doubt lose-making ChemChina Guilin Tire has become a burden which Wang has to deal with.

Second, Aeolus lacks of a leading team to revitalize the company.

Pirelli executives entered into Aeolus after Wang’s leave. As the restructure fails, the firm will have to go through personnel rearrangement.

Third, Aeolus’s internal business restructure goes slowly.

Aeolus completed the first asset integration of ChemChina’s industrial tire and owned a 10% stake in PTG and 100% stake in Chongche Auto Double Happiness Tyre, 100% stake in Qingdao Yellow Sea Rubber, and now it manages ChemChina Guilin Tire.

All these firms suffered different degrees of losses, the integration is still ineffective, and the advantages haven’t been realized.

Unknown future

Aeolus plans to take customers’ demand and the market as the priorities, targets at delicacy management and precision marketing, improve product structure, increase the proportion of high-end products, and make profit in the first quarter of 2018.

Wang’s back aims to continue the growing momentum of Aeolus, but whether Aeolus is on the ascending tunnel and how long it will keep the growing momentum? We will wait and see.