Foreign capital withdraws, global encirclement of Chinese tires. What to do?

On February 14, 2025, TOYO TIRE Co., Ltd. (Toyo Tire) held a board meeting to discuss the sale of its Chinese factory. The Japanese tire manufacturer signed an equity transfer decision agreement, transferring 86% of the equity of its Chinese tire production subsidiary TOYO TIRE ZHANGJIAGANG CO., LTD. (Tongyiou Tire Zhangjiagang Co., Ltd.) to Liaoning Hengdasheng Investment CO., LTD.

This news has been released, which makes people more scrutinize the Chinese tire market. What exactly are the intentions of many tire companies to withdraw their investments in the Chinese market?

Various forces are blocking Chinese tires
On June 12, 2024, the European Commission issued an announcement stating that if a solution cannot be reached with China, it will impose temporary countervailing duties on electric vehicles imported from China from July 4, 2024.

Compared with China's new energy vehicles, which are only now being suppressed by the EU's tariffs, Chinese tires have been treated unfairly for a long time. And the intensity of the double anti-dumping tariffs on Chinese tires is getting stronger and stronger. Try every possible means to prevent Chinese tires from entering the global market. Even Southeast Industry, the holy land for Chinese tire companies to go overseas, has not been spared.

Without further ado, people in the tire industry are also aware of the siege and interception of Chinese tires by various forces! In addition, even the Chinese market, which has been dominated by foreign capital for a long time, seems to be changing.

Foreign capital withdraws from the Chinese market
In the first quarter of 2024, Michelin Tire plans to dismantle three existing truck and bus tire vulcanization production lines and adjust the remaining mixed production lines.

On February 27, 2024, Bridgestone (China) Investment Co., Ltd. issued a notice that the group decided to terminate the commercial vehicle tire production and sales business of Bridgestone (China) Investment Co., Ltd., and strategic resources will focus on the high-end passenger car tire market, which is expected to grow.

On August 17, 2022, Dunlop Tire issued a notice on the integration of Dunlop Tire's China business. In the notice, Dunlop stated that it would stop the sales and production of truck and bus tires in the Chinese market from January 1, 2023.

In addition, the production capacity of engineering tires of tire companies in China has been reduced. This wave of foreign capital withdrawal that has lasted for ten years has forced us to re-examine Chinese tire companies and the Chinese tire market...

Tire design software
Both domestic and foreign tire companies pay more and more attention to the research and development capabilities of enterprises, and the design of tires cannot be ignored. UG (Unigraphics NX) is a product engineering solution produced by Siemens PLM Software, which provides digital modeling and verification methods for users' product design and processing processes. At present, UG is a design software that is used more in tire design.

Pro/E, a design software also commonly used by domestic tire companies, is an important product of the American Parametric Technology Corporation (PTC).

It is not difficult to find that in the field of tire design software, foreign products are leading the industry. In addition to application software, software platforms and data centers are dominated by European and American companies, and there are almost no domestic related companies providing services.

Domestic tire companies in China spend money to use other people's tools to complete their work. If one day other people's tools are no longer available to you, do we have to regress to the early development of the tire industry and rely on plagiarism to survive?

Tire production equipment
Speaking of tire production equipment, it is the top priority for the survival of enterprises. What equipment do enterprises need? Where do these equipment come from?

Especially with the advancement of industrial intelligence and industrial interconnection, equipment with higher efficiency and quality assurance is crucial, and its compatibility and scalability should not be underestimated.

Tire production covers mixing, cutting, molding, vulcanization and other processes. Most of these equipment are also foreign resources. The top tire molding machine VMI is from the Netherlands, the cutting equipment FISCHER is from Germany, the rubber refining equipment company Mitsubishi Heavy Industries (MITSUBISHI) is from Japan, and the equipment for the vulcanization process Kobe Steel (KOBELCO) is also from Japan.

Not only the production equipment of tire companies comes from abroad, but the testing equipment of domestic companies is also basically occupied by foreign forces.

Tire testing equipment
With the development of the industry, tire companies pay more and more attention to the performance and in-depth research of products, and related testing equipment has also emerged.

The axle 6-component force measurement system is a vehicle performance test tool of Japan's TML company. The MTS equipment of the United States and the products of the German ZF company are widely used in tire companies; the holographic technology of tire products is like taking an "X-ray" of the tire, and the internal structure of the tire is clear at a glance. This technology comes from the United States. There are many other testing equipment involved in tire companies, and most of these equipment are foreign brands.

Equipment is the highlight of the capital investment of tire companies, ranging from tens of millions to hundreds of millions. Domestic companies use expensive funds to exchange for foreign production equipment and then produce cheap tire products for export overseas. Only the companies themselves understand the bitterness.

Tire production raw materials
A tire factory must have raw materials to produce. The main raw materials of tires can be divided into the following categories, namely natural rubber, carbon black, steel wire, rayon and various modified small materials.

As for natural rubber, although some parts of the country also have it, the output is low and the quality is poor. At present, most of the natural rubber of domestic tire companies mainly relies on imports.

In addition to natural rubber, carbon black and steel wire commonly used by tire companies mainly come from carbon black manufacturer Cabot (American company); steel wire is Bekaert (Belgium). There are hundreds of other tire small materials, but the cost in tire production is not high. It is not difficult to find that the main source of important raw materials for tire production is also dependent on imports.

Cimcorp from Finland is even more powerful. Cimcorp is committed to the factory automation construction of tire companies and is responsible for a full set of turnkey systems, including not only all automation equipment but also all system control, project management and seamless integration.

Many tire companies at home and abroad have cooperated with Cimcorp in the field of factory automation. When the tide recedes, domestic tires are nothing. High-cost-effective tire products produced with the most expensive equipment and the best raw materials are collectively resisted by foreign markets. But this is the real situation currently faced by Chinese tire companies!

Although the Chinese tire industry is booming, it still has a long way to go in terms of earning ability, brand influence, and technological content compared with the world's advanced level.