Sales volume plummeted by 21%, operating rate was 44%, and tire business declined
Recently, the automobile production and sales data for January 2025 were released, and commercial vehicle sales are still disappointing.
Commercial vehicle sales plummeted
Although the Spring Festival holiday had a certain impact on commercial vehicle tire sales, the decline of more than 10% was far beyond the industry's forecast.
According to the data from the China Association of Automobile Manufacturers, in January 2025, the demand for commercial vehicles continued to decline, with monthly sales of only 290,000 vehicles, a month-on-month decrease of 21.1% and a year-on-year decrease of 10.3%, and there were still 9,000 commercial vehicles in inventory. The market's digestion capacity is worrying.
Although after October 2024, a series of favorable real estate and transportation policies have led to a double increase in commercial vehicle sales in the last three months, both month-on-month and year-on-year. However, since the new US president took office in January and imposed a 10% tariff on Chinese goods without distinction, China's price advantage has been further suppressed, and concerns about the transportation market closely related to exports have resurfaced!
Especially in the heavy truck market, even with export sales, only 70,000 units were sold in January, a month-on-month and year-on-year plunge of more than 15%! Not only the heavy truck market, but also light truck and medium truck sales have experienced varying degrees of decline.
The medium truck market sold 10,600 units, a month-on-month decrease of 9.02%, and almost the same as last year. In 2024, the sales of light trucks, which have been "proud" in 2024, were only 147,100 units in January, a month-on-month decrease of 16.47% and a year-on-year decrease of 9.34%; the sales of many companies in this market fell by more than 7%.
Due to the complex transportation road conditions and high frequency of use, the replacement cycle of truck tires is generally about 1 year, and no more than 2 years at most; this also means that the tire replacement market wants higher sales and relies on the sales of new trucks.
But the fact is that since the second half of 2023, truck sales have been getting worse and worse. Now even the "light truck tires" listed as a growth point in the replacement market in 2024 are laying mines for sales in 2026.
It can be said that the sales data of the commercial vehicle market in January 2025 has sentenced all specifications of the Chinese truck tire replacement market to be "wiped out". The eyes of the tire sellers are dark! Not to mention that sales will not increase this year, sales next year will be difficult!
Truck tire market with no investment
In the first quarter of 2024, the Chinese truck tire market almost drove away all foreign tire companies.
In the first quarter of 2025, the Chinese truck tire market is "ordering" Chinese companies to stop production.
As of June 2024, the average price of 12.00R20 passenger car tires in the Chinese market has fallen to 600 yuan per tire. At this price, the tire inventory time is still getting higher and higher. At the end of December, it takes almost 45 days for a truck tire to be purchased and sold.
According to this inventory turnover rate, in 2024, the sales of many tire dealers and retailers will drop by at least 30%. However, seeing the sales data in 2025, it is even more desperate. The current situation of low sales and low profits not only troubles the sales side, but also the tire factories.
Except for the leading tire factories, most tire companies have felt the colder market in 2025-45 days after the start of work, the average operation rate of all-steel tires is only 44%. Even with the support of orders from the stockpiling conference, the highest operation rate of all-steel tires in tire factories in February was just over 60%. The operating rate line for tire factories to make money is 70%.
Now tire factories make a loss for every tire they make. Previously, the operating data of tire companies showed that the gross profit margin of tire factories that mainly produce truck tires in their country was only 5%! Losing money to make tires, shouting at the top of their throats without sales, Chinese tire companies are also facing a "factory closure crisis".
Even those foreign investors who do not know much about the tire industry and think that the tire business is still "profitable" rarely touch the full-steel tire capacity when investing in tires. Investment data in the past two years show that the new full-steel tire capacity planning is only about 23 million, accounting for less than 7% of the total capacity investment.
