The Tire Survival Battle in the Fourth Quarter

As the fourth quarter approaches, three things are always present on the desks of tire professionals: thick price increase notices, bright red annual progress charts, and constantly updated inventory statistics. The surge in raw material prices, coupled with the rigid year-end performance targets, creates a sharp conflict with weak demand during the traditional off-season. Inventory pressure hangs like a boulder overhead, becoming an unavoidable survival challenge for the entire industry.

The wave of price increases, driven by cost pressures, has left dealers facing a dilemma.

The price increase came without warning, yet it was unstoppable. Since September 2025, dozens of tire companies, including Maxxis, Sailun, and Yokohama, have issued price adjustment notices. TBR tire prices have generally increased by 2%-3%, and passenger car tires have seen increases of up to 3%.

The root cause of these price increases lies in comprehensive cost pressures. The prices of core raw materials such as natural rubber and stearic acid have increased by over 5% in the past three months. Coupled with the continued rise in transportation and labor costs, tire companies have been forced to shift the pressure through price adjustments.

For dealers, price increases mean further squeezed profit margins: a mere 3% increase in the price of a 12R22.5 truck and bus tire adds 70 yuan to the purchase cost. Based on a purchase order of 200 tires, this adds nearly 140,000 yuan to the capital tied up for just one brand. Even more worrying is the company's explicit statement that it "does not rule out further price adjustments," forcing dealers to choose between stockpiling to hedge risks and controlling inventory to prevent losses.

The off-season coupled with the demand for increased sales has trapped dealers in a cycle of "the more inventory you hold, the harder it is to sell."

The wave of price increases coincides with the demanding demand for increased sales at the end of the year. Although the fourth quarter has entered the traditional off-season for the tire industry, the imbalance between production and sales of all-steel tires persists. The gap between cumulative production of 33.7 million units and estimated sales of 33 million units reflects the market's limited absorption capacity.

However, brands still view the fourth quarter as the "final battle" for annual performance, especially in the commercial vehicle sector. Although fourth-quarter production is expected to decline by 15% compared to the same period last year, the short-term surge in demand for supporting components has companies still hoping for a sales boost.

This expectation ultimately translated into sales pressure for dealers: A tire wholesaler in Shandong revealed that October orders increased by 20% compared to September, but the pace of transaction in the terminal replacement market slowed significantly, with some stores experiencing a delay in truck tire delivery from 40 days to 48 days. To meet these targets, many dealers were forced to increase their purchases, resulting in the industry's operating rate remaining above 68% for six consecutive weeks, creating a vicious cycle of "the more inventory, the harder it is to sell."

The dual squeeze has put pressure on inventory, resulting in both hidden losses and physical losses.

The dual squeeze of price increases and sales surges has ultimately concentrated pressure on inventory. The 3.8% decline in all-steel tire exports in the fourth quarter compared to the third quarter has further complicated the domestic market's inventory management. Overstocking not only ties up significant working capital but also carries the risk of physical wear and tear. If humidity and temperature aren't properly controlled during storage, tires can easily age and deform, directly impacting their secondary sales value.

Even more problematic are the hidden losses caused by price fluctuations. One dealer calculated that despite a 3% price increase in October for 1,000 tires purchased in September, the interest earned on the tied-up inventory had already swallowed up nearly half of their profits. If subsequent demand falls short of expectations, the overpriced inventory could become a significant liability.

Breaking the Gap: Exploring Multiple Strategies to Find a Way Out for Year-End Gambling

Faced with this predicament, some tire industry professionals have begun exploring solutions. Some are adopting a categorized processing strategy, pricing new tires separately from repaired and refurbished used tires, accelerating turnover through limited-time discounts and bundled sales.

Some are strengthening cross-industry collaborations, establishing inventory-sharing mechanisms with auto repair shops and used car markets to expand distribution channels. Still others are optimizing their inventory structure.

Based on Zhuochuang Information's prediction that "semi-steel tire exports will still see a 10% year-on-year increase," they are increasing their inventory of passenger car tires to balance the inventory pressure of full-steel tires. While these attempts may not yield immediate results, they provide a path forward in navigating the current wave of price increases and inventory pressures.

For tire professionals, the tension of the fourth quarter is essentially a concentrated reflection of industry cycles and market fluctuations. Faced with the reality of irreversible cost increases and unavoidable workloads, only by accurately assessing market trends, optimizing inventory management, and expanding sales channels can one maintain survival in this year-end scramble.