Since 2012, the trend of the tire industry has continued to be sluggish, and companies’ willingness to invest has been weak. At present, tire companies are still in the de-stocking stage, and the growth momentum is expected to slow down. Shang Pu consulting machinery industry analyst pointed out: The tire industry is affected by the economic weakness, the lack of market demand growth; the prevalence of international trade protection and technical barriers, but also to export pressure. It is expected that high inventory and low sales will remain the mainstream of the tire market in the near future. From January to February of 2013, driven by the increase in domestic demand, the tire industry produced 13.83 million tires, a year-on-year increase of 13.8%. Although the start was good, the overall momentum was not strong from the investment of tire companies. In the first two months of this year, the tire industry plans to invest 68.7 billion yuan, a year-on-year decrease of 1.1%; completed investment 4.69 billion yuan, an increase of only 2.7% year-on-year. In 2012, due to the dismal sales of tires and falling prices, all dealers accumulated a lot of inventory. At present, tire companies are basically in the state of digesting the backlog of inventory. Some of them not only store tires in the warehouse to the prescribed height limit, but also pile tires on the road. Because of the large amount of liquidity required for inventory backlog, many companies feel the pressure of cash flow difficulties. The increase in debt has also lowered the safety factor of funds and increased the risk of capital chain fracture. From the perspective of the entire industry, China’s tire industry has a structural overcapacity and the homogenization of products is serious. The competition among tire manufacturers has become increasingly fierce. In this context, domestic and foreign brands of tires continue to increase promotional efforts, such as taking quarterly awards, full-year contract cash prizes, designated promotional specifications, one-stop pricing, buy gifts and other measures, crazy to snatch market share. In the fierce competition, prices keep falling, and profit margins are squeezed. In addition to fierce market competition, tire companies must also follow the trend of reform marketing model. Direct sales of products, online sales, etc. force domestic manufacturers and distributors to make timely transitions and improve rapid response capabilities. Some companies and distributors competed for space for survival, spending huge sums to build direct-operated stores, and adopting measures such as expanding storage capacity, tire distribution, and after-sales services, so that they could directly take delivery from the warehouse and deliver the products quickly to the end users. According to the “2013-2017 China Tire Manufacturing Market Depth Survey Report†issued by Shangpu Consulting, it shows that in recent years, due to the economic downturn, the shrinking demand in China’s auto market has directly affected the prosperity of the tire industry; coupled with the deteriorating export situation, tire companies The investment willingness is generally not high. It is expected that in the next few years, the tire market in China will still maintain the oversupply situation. Each tire company will face a reshuffle of the survival of the fittest.
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