Zhongce Rubber Builds Factory in Vietnam

On April 1, 2026, Zhongce Rubber, a leading domestic tire manufacturer, announced its plan to invest RMB 1.041 billion to build a tire production base (Phase I) in Vietnam. This move marks a key step in its global production capacity layout.

Zhongce Rubber stated that the choice of Vietnam was not accidental, but rather based on a dual strategic consideration of global market demand and Vietnam's comprehensive local advantages. The aim is to optimize the supply chain, reduce manufacturing costs, and enhance the global competitiveness of its products, ultimately leading to the decision to establish a presence in Vietnam.

From a global market demand perspective, with the steady growth of global car ownership and the rapid popularization of new energy vehicles, tires, as essential consumables, continue to enjoy strong market demand. In recent years, "Made in China" tires have gained increasing recognition in the global market due to their reliable quality and high cost-effectiveness, with overseas demand for high-quality Chinese tires showing a steady growth trend.

As a leading enterprise in China's tire industry, Zhongce Rubber owns several well-known brands, with products covering all sectors. This investment in Vietnam will help it get closer to its overseas target markets, respond quickly to demand, and further expand its global market share.

Vietnam's multiple advantages were the core factors attracting Zhongce Rubber to build its factory. Regarding natural rubber supply, Vietnam is the world's fourth-largest producer, with a total output of 13,000 tons in 2024. Its planted area exceeds 900,000 hectares, boasting the highest average yield per hectare in Asia. Furthermore, its rubber trees have a young age structure, with 80% of the trees in peak production, ensuring a stable and high-quality supply of raw materials for tire production.

Simultaneously, Vietnam leverages its rubber resources in neighboring countries through an "overseas planting – domestic processing – global export" industrial chain model, further guaranteeing the stability of raw material supply and significantly reducing Zhongce Rubber's raw material procurement and transportation costs.

Vietnam's advantages are particularly prominent in production cost control. Electricity, labor, and shipping costs are all lower than in China and other tire-producing regions, helping Zhongce Rubber maintain competitive manufacturing costs. In particular, southeastern Vietnam's proximity to international ports facilitates maritime transport, significantly shortening customs clearance times and further reducing logistics costs for product exports.

Moreover, Vietnam's rapid economic growth and stable political and diplomatic environment in recent years have made it one of the world's major tire manufacturing and export bases, attracting numerous upstream and downstream enterprises and forming a complete industrial chain, providing strong support for Zhongce Rubber's production and operations.

More importantly, Vietnam, as a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), enjoys double tariff benefits.

Leveraging the CPTPP agreement, Zhongce Rubber's Vietnam base exports tires to member countries such as Japan, Canada, and Australia, enjoying significant tariff preferences, or even zero-tariff treatment, effectively circumventing trade barriers in some countries and further enhancing export competitiveness. Industry data shows that in 2025, the US imported 8.91% of passenger car tires from Vietnam, and truck tire imports increased by 33.3% year-on-year, making Vietnam a crucial global tire export hub.

It is understood that the first phase of Zhongce Rubber's Vietnam base project will focus on the semi-steel radial tire market, achieving an annual production capacity of 5 million tires upon completion. This will primarily cover the passenger car and new energy vehicle tire markets, with an estimated average annual revenue of 849 million yuan and a return on investment of 17.51%.

This strategic move is also a significant step for Zhongce Rubber in perfecting its overseas production capacity matrix. Previously, the company had already built and put into operation two major overseas bases in Thailand and Indonesia.

With the establishment of the Vietnam base, it will further build a production capacity network covering multiple regions such as Southeast Asia and North America, helping the company to achieve flexible allocation of the supply chain, better cope with the complex international trade environment, and promote the company's transformation from "Made in China" to "Multinational Operation".