Domestic Tire Enterprises Start Strategic Transfer

The Canton Fair is a barometer of China’s foreign trade. The reporter learned from participating in the 106th Autumn Canton Fair's Tire Enterprise Division that due to the implementation of special safeguard measures by the United States for US-to-China tires in September, Chinese tire manufacturers have been unable to obtain any new orders from the United States at the Canton Fair. Exports basically stagnated, and this situation also had a certain psychological impact on distributors in other countries, resulting in significantly lower turnover intentions than in previous years. However, after investigation, the reporter also found that many domestic tire companies did not passively wait for feedback from the US market, but instead turned to open up markets in other countries.

On October 27, relevant personage of South China Rubber Tire Co., Ltd. said in an interview with reporters that as an export-oriented export company, the sales staff of the company's marketing department all attend the Canton Fair at home every year. But this year's Canton Fair made them feel different from previous years. They received a total of more than 40 customers from Asia, Africa, Europe, the Americas, and Oceania, which not only decreased compared to the previous Canton Fair, but also had more consultations among customers. Only a small portion of the orders were intended. There are also customers from the United States. From the perspective of the exchange, the adverse impact of the special security case has begun to appear.

"The Canton Fair has a lot of people coming to us for consultations here. There are also quite a few companies signing up in other countries, but there are fewer orders for export to the United States." Sun Shumin, Director of the International Market Service Department of Shandong Triangle Tire Co., Ltd., accepted the reporter on October 27th. Said in a telephone interview. It is understood that Delta’s tire export volume to the United States has dropped from more than 300,000 monthly averages to more than 100,000.

The staff of the securities department of Jiatong Tire Co., Ltd. told reporters: “Last year, our passenger and light truck tires for export to the US market accounted for about 1/4 of the company’s total sales revenue. Therefore, the US’s special insurance ruling has had a significant impact on us. "Wang Xiaomei, head of overseas marketing department of Shandong Linglong Tyre Co., Ltd., said that the special security case's ruling made it impossible for Chinese companies to obtain new orders from the United States.

It is understood that on the one hand, U.S. sellers have stockpiled a number of stocks, and on the other hand, they are also watching consumers accept the price increase. After a period of observation, the U.S. market will consider whether or not to place orders for China's tires and how much will be placed after comprehensive laws, costs, and other factors.

As the time since the implementation of the special safeguard case lasted one month, the degree of influence of the company could not be accurately budgeted. However, in the face of the difficulties caused by the special security case, China's tire companies basically showed a more positive and mature response attitude: not negative Waiting for feedback from the U.S. market, it focused on breakthroughs in emerging markets to compensate for the losses caused by the special security case as soon as possible. From the Canton Fair, the performance of tire companies can be seen.

The staff of the South China Tire Exhibit told reporters that they had brought the company’s first air-conditioned tires independently developed by the company. This product passed the European certification in May this year. In previous years, these high-end products could only be exhibited in European or American tires. In China, this kind of run-flat tires is the first appearance at the Canton Fair, which has attracted the attention of many European and South American merchants. In addition, at the Canton Fair, most of the customers were also very interested in the company's new high-performance car tires, snow tires and other new products, and recognized the international reputation and product quality of the Wanli brand, and some customers reached a clear Intention to cooperate. At the same time, the company is actively negotiating with new and old customers to make full efforts to make up for the loss in the US market. This verifies that the company's decision is correct, "Only export high-end tires can be invincible."

Sun Shumin of Shandong Triangle Tire Co., Ltd. introduced that products of triangular tires have already begun to transfer to markets in the Middle East, Africa and Latin America. In this Canton Fair, the company signed a lot of contracts with customers in other countries. This is the result of the company's strategy of diversifying its products and diversifying its market, constantly improving its product quality, and striving to keep its customers stable.

“At present, the company has stopped producing products for the U.S. market and switched to production and supply of tire types in other countries' markets. The strategic adjustment of the company’s production is also in progress: First, adjust the product structure and improve product quality and added value; We will adjust the market structure and shift the products originally exported to the United States to the domestic market and other emerging markets such as the Middle East,” said a staff member of Fujian Jiatong Company.

In addition, through investigation, it has been learned that some tire companies are still transferring their brewing business, for example, Xiamen Zhengxin Tire Co., Ltd. considers transferring production operations to overseas factories. In an interview with a reporter, relevant personage of Hankook Tire Company stated that last year, the company’s Chinese factory exported 3.5 million tires to the United States, which accounted for 12.5% ​​of China’s production capacity. In the future, this part of the output to the United States will be transferred to local Korean factories. South Korea's Kumho Tire Co., Ltd. has also taken the same approach and plans to use factories in South Korea and Vietnam to undertake Chinese tire production from Chinese factories. Taiwan Zhengxin Rubber Industry Co., Ltd. management also revealed that the company will transfer the production of passenger car and light truck tires from the Chinese mainland to factories in other countries and regions.

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