Severe polarization of tire industry in Shandong

Zhang Hongmin, chairman of Rubber Industrial Association in Shandong province, has delivered a keynote speech about the development of the tire industry in Shandong on the 18th National Rubber Industrial Information Release Conference.

Latest statistics show that Shandong’s tire output was 39.28 million in Sept., down 5.08% from Aug., or 3.33% from the same period last year.

The output of radial tires was 32.31 million, down 6.12% from Aug., or 2.19% year on year.

Although the output dropped in Sept., the comprehensive indicators in the first three quarters this year still showed a growing momentum.

Shandong’s tire output in the first three quarters totaled 359.51 million, up 5.06% year on year and accounting for 48.1% of China’s total. The province’s output of radial tires reached 298.94 million, up 5.65% and accounting for 53.4% of the total in China.

The province’s tire export also kept increasing.

Shandong exported 170 million tires in Jan.-Sept., up 1.8%; the export value grew 13.2% to 41.97 billion yuan; and the average export price rose 11.2% per tire.

However, the economic efficiency of Shandong’s tire sector has decreased this year, and the trend of polarization became more obvious.

Listed producers, such as Triangle Tire, Linglong Tire, Sailun Jinyu, Qingdao Doublestar, and some large-scale producers performed well.

They realized environmental-friendly production and intelligent manufacturing, which propped up industrial development.

But many small and medium-sized tire producers closed down as they lacked high technology, innovation ability, and enough cash flow.

Zhang said merger and acquisition is the trend of Shandong’s tire sector, some tire producers will be eliminated. It will be a good thing for the healthy development of the entire industry.