How to deal with the "double reaction" and the decline of the tire industry


It is advisable for companies to actively cooperate with investigations. However, some companies are not active in this regard, and some do not complain, and some even directly abandon the US market.


Recently, at the “National Conference on the Management and Export of Tires and Related Industries” held in Shanghai, the reporter met with Mr. L, an industry insider from Shandong. During the conversation, Mr. L bluntly expressed his opinions on a number of industry issues, but said that it was not easy to make public names.

The reporter learned that the US market is an important market for Shandong tire companies. Statistics from the Customs show that in the first three quarters of 2015, Shandong exported 21.47 million new pneumatic tires to the United States, a significant drop of 37.5%, close to 40%. How to achieve breakthrough has become a difficult problem for tire companies.

Tire enterprise operating rate is only 50%

Reporter: At present, the operating conditions of China's tire companies are generally unsatisfactory. What is the extent to which Shandong, as a major rubber tire industry, can be poor?

Mr. L: As a result of the “double reverse” and economic downturn, the overall decline in the tire industry was severe. Coupled with continued declining rubber prices, the price of tire products was depressed, and the industry conditions were very poor. At present, the operating rate of tire companies is only 50%.

Reporter: Is Shandong Shandong's rubber tire company the case?

Mr. L: This is basically the case in the country. Major companies including Aeolus and China Strategic have all been affected. The previous "double opposition" was for semi-steel tires, and now the engineering tires are also facing anti-dumping investigations in the United States.

Today, the economic downturn has spread throughout the manufacturing industry, and shipbuilding and the industry have been affected.

Reporter: How do you think the industry regulators should deal with the "double reverse" and the decline in the tire industry?

Mr. L: "Double antipathy" is that others "opposite" us. Therefore, the supervisory department can only do its utmost to help the company respond to the case, contact the law firm to negotiate, and help the tire company to obtain a relatively low tax rate. In addition, Shandong Province has also implemented some preferential policies for tire companies.

To cope with the "double reverse," companies should be able to actively cooperate with the investigation. However, some companies are not active in this regard, and some do not complain, and some even directly gave up the US market.

Overseas construction is not just a matter of funds. Reporter: At present, some Chinese tire companies go overseas to build factories. Do you think this can ease the impact of the “double reverse”?

Mr. L: It is very effective. The overseas layout of exquisite tires made them less affected by the "double reverse", including the racing wheel Jinyu.

In general, tire companies that build factories overseas are more or less better than those in the country. The operating rate abroad is obviously better than domestic ones. The tire tax rate for companies exporting from China is too high, and those tire companies that are the first to be deployed overseas are very wise.

Reporter: Has Shandong Province taken any measures to encourage tire companies to “go out”?

Mr. L: After all, the thinking of each company is different. Some companies have no way to invest even if they want to invest overseas. They still have to take the road to export. Therefore, industry regulators can only appeal and guide.

It should be noted that investing in factories overseas involves more than just funding issues, but also involves a series of issues such as local labor, law, religion, culture, and taxation. For example, in Southeast Asia, Thailand's investment environment is different from Indonesia's. Indonesia is not the same as Cambodia. Countries vary greatly.

In addition, foreign workers are not like domestic ones. They usually do not work overtime, and local laws absolutely stand on the side of workers.

The highlights of the industry exhibition Reporter: As a big province of rubber tires, there are several annual exhibitions in Shandong Province. How do you think the current situation of tire exhibitions has changed compared with previous years?

Mr. L: It is much better than in previous years.

Reporter: What are the specific aspects of performance?

Mr. L: The number of exhibitors, the area of ​​the exhibition halls, and the number of visitors have all increased, including the number of foreign businessmen also increased over the previous years. In addition, a relatively new phenomenon in recent years is that the proportion of wheel companies participating in the exhibition has increased.

Reporter: The time of these exhibitions is very close. Do you think that the competition between major exhibitions will become bigger and bigger? Will there be reorganization and integration? What is the direction of future industry exhibitions?

Mr. L: The focus of the various exhibitions is different. For example, Guangrao Exhibition focuses on raw materials, Qingdao Exhibition highlights foreign trade, and the Oakhouse Expo forum is more successful.

The decline in the industry, tire companies participate in different exhibitions will certainly increase costs. Therefore, all major exhibitions must try to highlight their own highlights. Of course, participating in non-participation will ultimately be determined by the companies themselves.

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