Triangle tire: predicament breaker
2012-3-11 0:00:00Author： Xinxin WangFont Size：Big Medium Small
(Triangle Tire's Chairman, Ding Yuhua)
Recently, there is a piece of news circulated secretly among China’s tire industry: Triangle Tire Co., LTD, China's leading tire enterprise, shut down 34-year-old biasply light truck tire and truck tire production lines.
Although Triangle Tire did not intend to publicize the message, it still aroused strong repercussions in the tire industry. Because it is the first tire company to bid biasply tire complete farewell in China.
It seems that Triangle Tire is sounding clarion call for the upgrading of China's tire industry.
Ding: Seek for breakthrough
Two years ago, Yuhua Ding, the Triangle Tire's chairman, began to think about a question: as an old enterprise, how could it start industry upgrading and where is the breakthrough to find a new productivity mode?
Triangle Group, established in 1976, is the largest tire manufacturer and supplier in China. Its annual production capacity has achieved 30,000,000 sets of tires per year, and its serves customers in 160 regions and countries. Every year, over 20,000,000 tires are sold around the world.
However, facing increasing cost of labor and raw material, Triangle Tire is also confronted with survival pressure as other Chinese local tire enterprises, under intensifying competition in China's market and international trade barrier encountered in export.
Ding realized that upgrading was the key to walk out of predicament. In another word, he thought that low cost and low added value products were not competitive in market anymore. To find out a way out of this mess, enterprises had to achieve a massive increase in products’ added value and market share.
Soon, Ding made an unprecedented decision: thoroughly close biasply tire production line and establish truck & coach radial tire lines, which are higher performance, higher-tech content and higher added value.
This is a daring decision. It was inexplicable to some people because it was nothing else than casting away the “gold bowl”. Nevertheless, Ding Yuhua insisted that to create "new productive model of tire industry", they had to give up relatively less developed biasply tire.
Under the guidance of "structure conversion and upgrading" policy, Triangle Tire adopted new processing technology and increased its production efficiency. At the same time, they established the first solar photovoltaic power station and realizing zero emission of industrial water.
Except for that, the company sped up deep research on engineering radial tire and giant tire series products.
Maybe, 2011 is the toughest year for most Chinese automobile and tire companies. But, Triangle Tire achieved 10% of sales growth. Its import and export sum reached $1.5 billion and earned foreign currency $730 million, increasing 40% year-on-year.
Meanwhile, the Triangle Tire was named as “the most innovative and growing enterprise” in 2011.
(List of Top Three Best Tire Brand in China)
Triangle’s Moralization
Triangle Tire’s story offered enlightenment for China's tire industry.
There are numerous of tire enterprises in China, but only a few of them can be called heavyweight self-owned brands. Because of comparatively undeveloped technology, those few homegrown brands have to be positioned on low-end of the line, seeing multinational corporations taking most of the market shares in hand, especially high-end.
In order to occupy the market, Chinese enterprises had to start price war, just like China’s lighter producers, who resulted in market chaos and then the industry fell into a vicious cycle.
Overseas, Chinese tire export is being blocked by the trade barrier. "The U.S.’ punitive tire tariff" reminds that the day of low cost is approaching to the end.
Ding said, in order to change thi
Tireworld
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