Practitioners told reporters that since 2013, the Dawang Town in Shandong, the largest tire-producing province in China, has started up less than 50% of its operating rate, which is far below the industry's lowest profit and loss point.
Ironically, as the world's largest single tire market and a major producer, China exported more than 400 million tires in 2012. In 2013, tire production and sales are expected to exceed 900 million.
The number of exports is so considerable that the domestic market still looks prosperous. Why do most self-owned brand tire companies suddenly fall into the abyss overnight?
"Back to plastic" tricky
Industry insiders pointed out that the long-term use of "back-grade rubber" and retreaded tires fool the domestic market and eventually self-eating, which is the root cause of the loss of the self-owned brand market.
A number of industry sources told reporters that even if conservatively estimated, if according to strict European and American tire quality standards, at present domestic minimum 20% 30% of car tires can be classified as “problem tyresâ€; commercial vehicle tyres “probability of problemsâ€, more It may be as high as 70%.
On September 10, a technologist from Kumho Tire interviewed by reporters said that because tire manufacturing involves natural rubber raw materials, various chemical agents, adhesives, nylon or steel curtains, trace metals, even carbon-silicon particles and other substances Chemical synthesis process, the industry believes that the first time the chemical reaction and molding a tire the best quality. When the tires are worn, scrapped, recycled, and then retreaded, various properties will be significantly reduced.
In general, tires have a 35-year lifespan and must be replaced after the expiration to ensure safety. In the past 10 years, China’s auto consumption has been operating at high levels for a long time. In recent years, more than 100 million scrap tires have appeared on the market every year.
"These tires include passenger car tires as well as passenger car tires, that is, car tires." On September 16, an tire dealer in Anhui revealed to reporters that after the recycling of used tires or car 4S shop, Most scrap tires will eventually flow back to the tire companies for second-time renovation.
For example, he said that a batch of waste tires for construction machinery that were recovered by hand in the second half of 2011 were all acquired by Dawang Township of Shandong Province. After local renovation, they would be distributed to distributors across the country at a very low price, and then they would be equipped with each Kinds of construction machinery vehicles.
Mr. Zhang revealed that the construction machinery vehicles and other trucks equipped with such retreaded tyres “can wear out a new tire as soon as one monthâ€, and even cause punctures and dead people.
Problem tire interest chain
What are the reasons that make such problems tires can flow into the market?
From the sales figures for 2011 and 2012, the top 13 sales in the Chinese market are foreign tire companies, followed by Michelin in France, Bridgestone in Japan, Goodyear in the United States, Continental in Germany (Germany), Pirelli in Italy, Sumitomo in Japan, Yokohama, Cooper of the United States, Hankook of South Korea, Toyo of Japan, Kumho of South Korea, Gyor Tires of Singapore, and Sibur-Russkie Shiny of Russia, followed by Chinese domestic brand Delta Tires.
In order to maintain its own brand image, international first-tier tire brands such as Michelin, Bridgestone, Goodyear, and Continental (Malaysian) have only given priority to the leading OEMs such as Mercedes-Benz, BMW, Audi, and Lexus. Well-known car brands) supporting; own-brand low-end car can only purchase 234 brand tires, and even unknown "non-three" brand tires.
“This is the unspoken rule in the Chinese auto market.†Li Xueming, a tire industry veteran, said that for its own brands such as Chery, JAC, Great Wall, Geely, and BYD, the top tire companies only allowed them to tire at the auto show. Equipped with daily batch support, it is basically not cooperative.
This supply and demand relationship is enough to create enough market space for domestic tire manufacturers in China. However, due to the small and scattered local tire companies, the competition is also a low-profit market for low-end car brands. The competition was highly heated and eventually led to the proliferation of tires in the “back-grade†problem.
"In order to compete for large orders, tire brands within the scope of the standard will generally compete to the corporate procurement department, relevant supervisors and key leaders, from top to bottom, to tie up the relationship." Mr. Zhang told reporters, general auto companies At the last moment, three tire companies will be selected, and the price difference will be used as the ultimate screening criteria. Finally, two companies will be selected to finalize the matching relationship.
Mr. Zhang said that tire purchasers generally charge prices in accordance with tire unit price per kilogram (a small number also according to the bar price), and generally lower the market price by more than 20%. In order to obtain a competitive advantage, tire companies generally secretly offer to purchasers. Point out the product defects of the competing products, alarmist, and allow them to profit, in order to obtain a greater share.
Afterwards, if certain tire companies have dredged their work in the interior of the main engine plant, in the follow-up batch matching, the tire companies will be able to replace the tires of the matching A product with the B product and the B product with the C product. (Note: Generally, the tire is divided into quality A, B, C three grades, A product is a large mainframe factory supporting, the quality is in full compliance with the host plant and national standard requirements; B product quality is lower than A product, some testing requirements can not meet the host plant and national standard requirements; C product is not Qualified tire products).
This increased the profits of enterprises, but it led to the decline in the quality of tires, and even a serious security risk.
With the mutual transfer of benefits, the sales staff of the tire companies and the procurement personnel of the OEMs are “not admitting each other†— the “hidden rules†formed over a long period of time in this kind of commercial cooperation are important reasons for the long-term slow improvement in the quality of domestic vehicles.
Causes of Environmental Deterioration: Differences Between Inside and Outside
Some tire industry believes that the host plant crushes the market profit margins of the second and third-tier tire brands and hosts in the market, making domestic tire companies unable to invest in high technology development, leading to stagnation of technology, and long-term support for tire technology and quality Progress can only grab the market with cost, which also exacerbates the vicious competition in the industry.
However, as a large tire exporter, Chinese tires are exported to developed countries or regions such as Europe and the United States. This shows that Chinese tires can in fact guarantee quality.
Why is the domestic tire market so chaotic? The reason is that China’s tire industry regulatory legislation has not yet “synchronized†with the world level. The tire accident also lacks an effective traceability mechanism. Therefore, some tire companies have persisted in the “internal and external differences†quality control and control in the Chinese and foreign markets for a long time. Products adhere to the "high quality", but almost no bottom line for the domestic market.
“For example, the Chinese “three packs method†for tires is not mandatory, which makes commercial vehicle tires in China’s market “not even three packs†at least 50%. In markets such as Europe and the United States, tires are used as commodities. 'It is hard to imagine.' Li Xueming said.
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