Since 2017, the profit of China's tire industry has dropped dramatically, resulting in a large number of loss-making enterprises.
Tire World Network recently in business communication, I heard a lot of worries.
Kidnapped by capital gamble
According to statistics from China Rubber Industry Association Tire Branch, in the first half of this year, the profits of domestic tire enterprises dropped by more than 70% year-on-year, and the monthly volatility was very big.
In the second half, manufacturers profitability has improved, but the profit decline is still about 58%.
In more than six months, the industry sales revenue increased 15%, profit plummeted more than 50%.
Shen Jinrong, chairman of Zhongce Rubber Group Co., Ltd., said that this shows that there is a problem with the operation of the entire industry and that it is unhealthy.
He believes that the crazy natural rubber market, a direct result of the huge turmoil in the tire industry. This is a birth defect in China's tire industry.
Shen Jinrong said the birth defects, mainly refers to China's natural rubber supply mechanism and pricing mechanism.
It is understood that due to a serious shortage of short mechanism, China's natural rubber futures market is very easy to be manipulated by funds, and futures prices directly affect the spot price.
Domestic tires, rubber products and natural rubber industry, suffered.
Shen Jinrong said that China's natural rubber market is evolving into a capital market as well as a market for casinos.
This distortion, in the long run, has seriously affected the healthy development of China's tire industry.
The biggest advantage is losing
The industry generally believes that China's largest tire competitiveness is cost-effective, with another word is described as: inexpensive.
However, in the eyes of some tire CEOs, this advantage of Chinese tires is gradually lost.
In recent years, the most talked about industry, is the rapid rise of China's tire brand. This can not be separated from the highly supporting industries.
Carbon black, steel cords, rubber chemicals, molds, machinery and equipment ...... In these tire supporting industries, have grown from a group of Chinese enterprises, and has international influence.
They provide cheap and good quality products to help China's tire industry grow rapidly.
"Now, the situation is changing," Shen Jinrong said with concern.
He found that foreign aid industry enterprises recently visited China frequently, especially frequently.
Because they saw that with the adjustment of China's industrial structure and policies, the opportunities are getting closer to manufacturers outside China.
According to another introduction, China's traditional coal tar black, is increasingly losing the price advantage.
In addition, China's labor costs are not particularly cheap at the global average or in emerging countries.
Shen Jinrong said: "We are more and more aware of the crisis. Enterprises have to think about this issue: how to maintain long-term competitiveness of Chinese tires?