China’s Radial Tire Industry May Sink into Stagnation

The growth of China’s radial tire industry has slowed down after rapid development, the crsis of overcapacity emerges, and the industry may sink into stagnation.

Radial tires can be divided into three categories: namely all-steel radial tire, semi-steel radial tire and all textile radial tires.

The advantages of radial tires include longer service life, small rolling resistance, low oil consumption, high bearing capacity and good shock absorption.

With its own advantages and policy support, radial tires developed rapidly in China. Chinese authorities issued numerous policies and regulations boosting the development of radial tire industry.

In 2000, the Chinese authority issued a circular to exempt radial tires from consumption tax.

In the same year, the Ministry of Industry and Information Technology issued the Policy of Tire Industry, aiming at increasing the proportions of radial tires to passenger cars to 100%, those to light-duty trucks to 85%, and those to heavy-duty trucks to 90% in the domestic market by 2015.

With the help of a variety of stimuli, the radial tire developed rapidly with mounting outputs.

According to a domestic research institute, the output of radial tires was less than 200 million in 2005, by 2014, the output exceeded 600 million. In 2015, the output slid for a short while; in the first 10 months of this year, the output was up 15.54% year on year.

The output increase of radial tires this year was induced by export pressure release in advance and higher demand from the auto market. While output decrease is the general trend for the development of the industry.

It means that the capacity of radial tire is close to saturation, the industry is under increasingly heavy pressure of de-capacity.

According to the research institute, the radial tire sector will develop slower or sink into stagnation, eliminate useless capacities, and reshuffle the structure of supply and demand.