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27 Tire Producers
In 2012, the global tire market size approximated USD185.8 billion, up 2.6% from a year earlier. The estimation shows that the growth rate in 2013 will be no more than 0.5%. In 2012, the global tire shipment reached roughly 1.461 billion units, of which, the OE tire for PLT use grew by 6%, for RT use dropped by 4%, for CV declined by 5%, and the RT tire decreased by 4%. In Europe, the shipment of OE tire for PLT use dived by 4%, and that of RT tire dropped by 10%, for CV declined by 4%, and the shipment of RT tire slumped by 10%; in North America, the shipment of OE tire for PLT use increased by 16%, that of RT tire declined by 2%, OE tire for CV surged by 2%, and the shipment of RT tire dropped by 2%; in Asia, the shipment of OE tire for PLT use grew by 11%, and that of RT tire rose by 2%, OE tire for CV declined by 9%, and the shipment of RT tire decreased by 6%; in South America, the shipment of OE tire for CV dropped by 30% as a result of the sluggish economic situation in Brazil.
In spite of sluggish market, the tire enterprises have enjoyed excellent performance, due to the fact that the cost of NR and SR, which are raw materials of tire industry, took a sharp decline. By the way, NR and SR make up around 50-60% raw materials cost of tire industry. In 2011-2012, the new NR capacities poured into the market, leading to continuing fall of prices. In 2012Q2, the NR was priced at USD5,225/ton, while the figure in 2012Q4 dropped to USD2,998/ton, down 43%; in 2011Q3, SR was priced at USD4,021/ton, while the figure in 2012Q4 declined by 18% to USD3,309/ton. Due to the market demand at low ebb as well as the oversupply of NR, there is little possibility that the prices will rebound. And it is estimated that the prices in 2013 will linger at a low level or even see further drop.
In 2012, the global tire enterprises saw a substantial increase in profit. And the gross profit of 41 Chinese tire companies surged by 62.8%. The increase of profit enabled global tire enterprises to stage an investment upsurge amid the market downturn which features relatively low investment cost. In order to get closer to raw materials bases and to cut down cost, Southeast Asia has become the first choice for industrial players.
Four Japanese tire tycoons including Bridgestone, Sumitomo Rubber, Yokohama and Toyo all made investments in Southeast Asia in 2012. In particular, the first three ones made their investment in Thailand, while the last one invested in Malaysia. And the Europe-based Pirelli made the investment in Indonesia. And the Chinese counterparts are also joining in the league to invest in overseas. The initiator came to Sailun Group, followed by Hangzhou Zhongce Rubber, Triangle Tire and Linlong which established their production bases in Southeast Asia.
Other investment attractions include emerging economies. Since China has an extraordinarily robust demand for luxury cars, leading European tire makers including Michelin and Continental are intensifying their investment in Greater China. In addition, Continental lavished USD71 million to take over India-based Modipuram, while Pirelli invested in Russia.