The soaring price of natural rubber has caused tire companies with overcapacity to “become worseâ€, and domestic companies’ prices have risen loudly. Yesterday, the Morning Post reporter learned from the tire export work conference in 2010 that due to the high profit rate of foreign-brand tire companies, there was no corresponding increase in prices when raw materials rose sharply, which has affected domestic brands that have already raised prices. To this end, domestic tire brand companies yesterday at the meeting called on tire companies should collectively increase prices.
Deep in the price war, "Foreign brands have high profit margins. Now that the cost has risen, they can still digest gross profit, and they haven't reached the point where they have lost money. Therefore, they have not kept rising prices now, which puts pressure on domestic-funded enterprises." Yesterday, a domestic-funded brand was large. Relevant person in charge of tire companies called for tire companies to raise prices collectively.
Zhang Wanyou, deputy general manager of Shuangqin Group Co., Ltd. (600623), said that this year, double money has gone up by 9 times in “small steps†and the total increase has been as high as 15%, but the overall cost of tires has increased by 35%. There are more than half of them that need to be digested by the company itself. It is very stressful
It is understood that in addition to tires companies facing the natural rubber, zinc oxide, magnesium and other tire costs, but also face serious problems of excess capacity. Zhang Wanyou predicts that next year domestic tire production capacity will increase by 20%, while the market's increase is estimated to be only about 10%, tire companies will have to rely on price war to seize the market.
It is reported that in order to grab the market, some companies even at the cost, in the days of natural rubber prices hit a new high, the recent promotion is also in disguise.
The same problem also appears on exports. It is reported that as foreign technology barriers are getting higher and higher and anti-dumping and anti-subsidy are becoming more frequent, in order to rob the market, companies often fight price wars. According to statistics from the Tire Branch of the China Rubber Industry Association, the export delivery value of 45 key tire companies in the first nine months of this year has fallen by nearly 5 percentage points from the previous year, and the number of exports to the United States has dropped by 25% year-on-year.
In the first three quarters, there were 11 losses in 43 key tire companies, including 7 domestic-funded enterprises and 4 foreign-funded enterprises.
“Although pricing is the autonomous market behavior of all companies, we still call for tire companies to raise prices collectively, because this is related to the survival of the entire industry.†Some industry insiders proposed at yesterday’s meeting.
Despite the appeal, there are not many domestic companies that are really willing to raise prices.
"At the conference, everyone said that they would raise prices. When they returned, they wouldn't go up. This kind of imaginary move made the 'honest' companies very passive." According to a person in charge of a large domestic tire company that participated in the meeting yesterday.
"The situation in the first quarter of next year will be very serious, because it is expected to increase prices, many dealers have high stocks, there will be a process of digestion early next year, and next year's production capacity will be released." Zhang Wanyou said.
The dilemma of foreign capital expansion of domestic capital has brought expansion plans to overseas giants.
Recently, Michelin announced that it will invest 10 billion yuan to expand production in Shenyang. In early November, Hankook has clearly planned to build a third factory in China. Yokohama Tire also revealed recently that it is currently planning a project to expand the production of passenger car tires. Goodyear's $500 million Dalian plant investment project will also be completed by the end of the year. Dongyang Tire's new plant in China has started construction.
According to the "Economic Observer" report, the world's major tire manufacturers' annual investment budget for 2010 is more than 8 billion US dollars, and plans to add 100 million sets of tire production capacity. According to the “European Rubber Journal†report, this figure was more than three times that of 2009, the second highest investment budget year in 25 years. It is worth noting that China is the place where the largest investment in tires is attracted. It is estimated that this figure is more than US$ 3 billion.
The Morning Post reporter learned at the same time yesterday that the German Continental Group has announced that in response to the dramatic increase in the price of natural rubber, the main raw material for tires, it has decided to increase the prices of summer and four-season tires for passenger cars and light trucks in the Asia-Pacific substitution market—an average increase of 5%. The new price will be implemented from December 1, 2010. However, most foreign-funded enterprises are still watching.
Deep in the price war, "Foreign brands have high profit margins. Now that the cost has risen, they can still digest gross profit, and they haven't reached the point where they have lost money. Therefore, they have not kept rising prices now, which puts pressure on domestic-funded enterprises." Yesterday, a domestic-funded brand was large. Relevant person in charge of tire companies called for tire companies to raise prices collectively.
Zhang Wanyou, deputy general manager of Shuangqin Group Co., Ltd. (600623), said that this year, double money has gone up by 9 times in “small steps†and the total increase has been as high as 15%, but the overall cost of tires has increased by 35%. There are more than half of them that need to be digested by the company itself. It is very stressful
It is understood that in addition to tires companies facing the natural rubber, zinc oxide, magnesium and other tire costs, but also face serious problems of excess capacity. Zhang Wanyou predicts that next year domestic tire production capacity will increase by 20%, while the market's increase is estimated to be only about 10%, tire companies will have to rely on price war to seize the market.
It is reported that in order to grab the market, some companies even at the cost, in the days of natural rubber prices hit a new high, the recent promotion is also in disguise.
The same problem also appears on exports. It is reported that as foreign technology barriers are getting higher and higher and anti-dumping and anti-subsidy are becoming more frequent, in order to rob the market, companies often fight price wars. According to statistics from the Tire Branch of the China Rubber Industry Association, the export delivery value of 45 key tire companies in the first nine months of this year has fallen by nearly 5 percentage points from the previous year, and the number of exports to the United States has dropped by 25% year-on-year.
In the first three quarters, there were 11 losses in 43 key tire companies, including 7 domestic-funded enterprises and 4 foreign-funded enterprises.
“Although pricing is the autonomous market behavior of all companies, we still call for tire companies to raise prices collectively, because this is related to the survival of the entire industry.†Some industry insiders proposed at yesterday’s meeting.
Despite the appeal, there are not many domestic companies that are really willing to raise prices.
"At the conference, everyone said that they would raise prices. When they returned, they wouldn't go up. This kind of imaginary move made the 'honest' companies very passive." According to a person in charge of a large domestic tire company that participated in the meeting yesterday.
"The situation in the first quarter of next year will be very serious, because it is expected to increase prices, many dealers have high stocks, there will be a process of digestion early next year, and next year's production capacity will be released." Zhang Wanyou said.
The dilemma of foreign capital expansion of domestic capital has brought expansion plans to overseas giants.
Recently, Michelin announced that it will invest 10 billion yuan to expand production in Shenyang. In early November, Hankook has clearly planned to build a third factory in China. Yokohama Tire also revealed recently that it is currently planning a project to expand the production of passenger car tires. Goodyear's $500 million Dalian plant investment project will also be completed by the end of the year. Dongyang Tire's new plant in China has started construction.
According to the "Economic Observer" report, the world's major tire manufacturers' annual investment budget for 2010 is more than 8 billion US dollars, and plans to add 100 million sets of tire production capacity. According to the “European Rubber Journal†report, this figure was more than three times that of 2009, the second highest investment budget year in 25 years. It is worth noting that China is the place where the largest investment in tires is attracted. It is estimated that this figure is more than US$ 3 billion.
The Morning Post reporter learned at the same time yesterday that the German Continental Group has announced that in response to the dramatic increase in the price of natural rubber, the main raw material for tires, it has decided to increase the prices of summer and four-season tires for passenger cars and light trucks in the Asia-Pacific substitution market—an average increase of 5%. The new price will be implemented from December 1, 2010. However, most foreign-funded enterprises are still watching.
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