Makers release more upscale models for segments with high growth prospects.
Declining margins are pushing China suppliers of car and truck tires upmarket. The industry is focusing resources on radial models, which currently dominate the passenger car segment. Outlook on light and heavy truck applications is also bright, with the 12th ﬁve-year development plan targeting 85 and 90 percent radialization in the lines, respectively, by 2015.
R&D work is geared toward making radials more environment-friendly. Changes in construction are being made to increase durability and reduce weight, rolling resistance and noise emission.
Upgrades have yielded tubeless types with bases 30 percent wider than traditional designs. Meant for trucks, such tires have 20 percent lower rolling resistance, resulting in 20 percent rubber and 2 to 3 percent fuel savings.
Companies see the line as having a growth potential amid its rising popularity in the US and the EU. Further, there are only about 10 domestic manufacturers specializing in the category, which means less competition.
Some makers are adjusting the formula of their rubber compound to improve the mileage of radial tires. In certain designs, trans-polyisoprene rubber is being adopted in place of SBR to reduce rolling resistance and heat generation, and improve fatigue tolerance.
At Tianjin Century Rubber Co. Ltd, the selection is expanding to include more models for high-end vehicles such as those of Mercedes-Benz. The company’s 17 to 26in releases can support a maximum speed of 300kph and last at least 80,000km.
Auﬁne Group Co. Ltd, which specializes in truck tires, has launched a semisteel series for cars. The line was developed in cooperation with specialists in Europe.
By improving product performance and increasing variety, suppliers hope to boost proﬁts or at least halt margin losses. Per-unit proﬁt was already at 4 percent in the ﬁrst half of 2010, down roughly 1 percentage point YoY due mainly to higher raw material costs.
Anti-dumping measures imposed on China-made tires in the US and other countries also contributed to the decline. These prevented suppliers from making signiﬁcant adjustments in quotes since the tariffs already raised the prices of their models.
Car and truck tires can be sourced from about 600 companies in China. Of the supplier base, one-fourth specializes in the ﬁrst line, while 20 percent manufactures the category together with designs for buses. The rest rolls out truck and off-road tires.
Roughly 40 percent of the industry’s output is shipped abroad. Releases adhere to various domestic and international regulations, including CCC, DOT, E-Mark and SONCAP.
The selection consists of radial and bias types, with the former accounting for the bulk of production. Radials can be subdivided further into semi- and all-steel versions.
Models for cars and light vehicles are generally of the tubeless semisteel variety. Basic types priced $23 to $40 per piece have diameters ranging from 13 to 17in and tread widths reaching 235mm. Speed ratings of S, T, U, H and V, and load indices of 70 to 100 are common.
Further up the price spectrum, tires with speed ratings of Z, W and Y are available. Designs have tread widths of between 215 and 304mm, while load indices are from 90 to 120. Models suit 17 to 26in wheels.
Tires with similar speciﬁcations but featuring patterns customized for certain applications are priced 15 to 20 percent higher. Grandstone Tyre Corp. Ltd provides models with grooves for better traction on snow, while Tanco Tire Industrial Co. Ltd offers pieces with properties for enhanced cornering.
Designs for heavy trucks, meanwhile, consist mainly of bias types in the low end and all-steel radials in the upscale segment.
Bias constructions typically come in sets, which include the outer tire, inner tube and ﬂap. Available widely between $60 and $100, these have inside diameters of 13 to 24.5in and tread widths of up 12.5in.
All-steel radials, which come with or without tubes, can reach $180. Ply ratings in this category range from 14 to 20.
Prices of China-made tires are expected to increase in coming months in line with the rising cost of natural rubber. In February, rates for the raw material exceeded $6,000 per ton, 18 percent higher than levels in mid-November 2010. To minimize the risk of loss from these surges in outlay, some trading companies have set 15 to 20-day validity periods for quotes.
Model: 9.00R20, 10.00R20, 11.00R20, 12.00R20
Model: 175/70R13, 185/65R14
Grandstone Tyre Corp. Ltd
Note:This article was originally published by Global Sources, a leading business-to-business media company and a primary facilitator of trade with China manufacturers and India suppliers, providing essential sourcing information to volume buyers through our e-magazines, trade shows and industry research.
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.
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