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Tireworld Insight: China’s tire industry on track of rapid growth

China’s tire manufacturing has witnessed swift growth over the past years underpinned by a solid national economy. Investment enthusiasm has been high and production and output capacity are growing vigorously.

Market observers noted it would be a little too early to say the rapid development era of the tire making industry had gone. Facts have shown the industry is right on track to secure steady growth momentum in the coming years.

Despite the negative impacts from the anti-dumping and countervailing programs initiated by some foreign countries, the firm demand generated from the domestic market – the world’s largest by sales volume – will continue to be a safe haven for the tire making industry, analysts say.

On the policy front, it is required that basically all passenger cars produced in China shall be equipped with radial tires by 2015, and the radial tire rate in light truck and heavy-duty truck sectors are set at 85 percent and 90 percent, respectively.

Analysts hold that the new policy signal will ensure a sound market demand and benign growth momentum of the tire industry in the next few years.

Nevertheless there were also analysts warning of the risks of overcapacity in the industry. As of the end of 2013, there are several hundreds of tire manufacturers in China, leaving basically the whole market under the pressure of overcapacity, they added.

The following is a chart showing China’s tire output over the five-year period between 2008 and 2013.