Tire investment heat quickly spread fears will brewing industry risk (a)

As the price of tire raw materials rose by 40% month-on-month and the price of tires in the United States continued to rise, the prices of tires for sale in the Chinese market also rose.

The reporter learned from a number of automobile tire franchise stores and automobile markets in Beijing and Shanghai that tire manufacturers such as Michelin, Bridgestone, Goodyear, and Kumho have raised the prices of domestic tires. According to different grades of tires, ranging from 30 to 50 yuan, and as many as 200,300 yuan. In this regard, the industry expects that the next price increase is 5% -10%, up to 40%.

In the interview with the reporter, Gu Sili, general manager of Cooper Tire China, analyzed that “the main driving force behind this round of tire price increases is the uncontrolled rise in energy, fuel, and raw rubber prices. The tire companies’ cost pressures have increased, and profits have also increased. Being deeply squeezed, prices have become an inevitable trend."

In addition, Zang Sili pointed out that last year, the country’s 4 trillion investment directly accelerated the pace of domestic infrastructure, and drove the increase in sales and utilization of card and passenger cars. "Because the trucks and buses need to be replaced once a year or several months, the sales volume of each tire manufacturer will increase, and the procurement of rubber will also increase. The price of rubber will also rise."

Hu Linping, manager of international trade department of Hangzhou Zhongce Rubber Co., Ltd., said: “Because the tire raw materials currently on the market are all purchased before May, it is reasonable to raise prices.” And for this round of price increases, the continuation of At the time, people in the industry have different opinions.

Tire prices rise globally

It is worth noting that the increase in tire prices is also the second wave of price increases in the global tire industry following the increase in tire prices in early 2010. This wave of price increases involves almost all tire companies and tire types, mostly in the range of about 5%.

With the increase in the price of tires, the global investment boom in tire companies once again rose. North America has always been the world's tire price indicator. Recently, Nexans Tire America, Pirelli North America Tire, Kumho North America and other tire companies in the United States have announced that they have raised tire prices.

In addition, rising tire prices are also spreading outside of North America. Based on the price increase of 5% in March 2010, the Swedish company Triest plans to raise the price of tires by 7% from July 1. The German brand Tire announced that it will re-adjust its ride from April 29th. The price of tires for trucks and light trucks rose by an average of 4%. India’s JK Tire Company announced a price increase of 3% to 4% in June. This price increase is the fourth increase in price of JK Tire within six months.

However, although domestic tire manufacturers generally raise their prices, according to Li Sili, the reporter explained that "China's tire industry exports and domestic sales have not been affected too much, and some varieties are still in a good situation. Even with the recent appreciation of the renminbi, it is not only not It has a negative impact on the export of tires, but it also increases profits because of price increases."

The reporter noted that many manufacturing companies have moved to the Midwest in order to increase profits and reduce labor costs. Will the tire industry also choose this route?

Yu Sili said that "the choice of the tire industry plant base is first to consider close to the origin of raw materials, and the rest of the factors."

Investment "surge" risk spread

In addition, the reporter noticed that since the beginning of this year, a tire investment fever has spread rapidly throughout the country, and it is beyond expectation.

French Michelin recently officially launched 1.2 million sets of all-steel load-bearing tire projects in Shenyang; Yokohama Tire Corp launched the tire expansion project in Hangzhou in April; Japan's Toyo Tyre & Rubber Co. plans to invest approximately JPY 15.5 billion in 2010 fiscal year to increase its presence in North America and China. Tire production capacity; Zhengxin Tire (Taiwan) Group launches 10 million radial tires project at its longevity production base, with a total planned investment of US$1 billion, and will be able to annually produce 8 million semi-steel radial tires and 2 million all-steel tires after completion. .

According to incomplete statistics, as the price increase boosts, there are as many as 40 new tire projects, and the total number of steel tires is as low as 600,000, and as many as tens of millions; the number of passenger tires is as low as 3 million, and as many as 1,500. Tens of thousands of units, production capacity has seriously exceeded demand, and the risk of overheating investment has started to emerge. Will this increase the fierce competition and disorder in the tire industry?

In response to this, Cooper Tire Co., Ltd. confessed to reporters, "This is a very dangerous industry signal."

“The tire industry is an industry with a certain threshold. If the outside world only sees his profits, it will inevitably encounter difficulties and will intensify the risks faced by the entire industry.”

“In addition, although the tire market will grow in the long term with the growth of the automotive market, tires are a very profitable industry. Therefore, capacity utilization is very important. If manufacturers blindly expand production despite actualities, once raw material prices fall, The price war is inevitable, and some tire companies with weaker strength may face the risk of being reshuffled.” Yan Sili expressed some concern.