Chinese Tires Eat Into The European Market......

How aggressive is the Chinese tire attack on the European market?
In 2019, when the share of Chinese passenger car tires in the European market was 59%, it shocked many local European industry insiders. By 2023, the increase in this set of data was even more amazing - reaching 71.2%. It can be said that the combined share of European, American, Japanese and Korean tires in the European market is just over 1/3.
It is no wonder that the European Tire and Rubber Manufacturers Association (ETRMA) reported that Europe (EU 27 + UK) imported "low-cost" passenger car and light truck (PCLT) tires from China sharply increased - in just 4 years, the share of Chinese tires in Europe increased by 12.2 percentage points
ETRMA said that if the sales data of Chinese passenger car and light truck tires at the end of 2023 are compared with the relevant data in 2015, it can be found that the sales growth of Chinese tires in these two market segments exceeded 40 million sets.
40 million sets in 8 years, the fastest growth cycle is from 2022 to 2023. Data shows that in the past two years, the annual sales growth of Chinese passenger car tires and light truck tires in Europe has exceeded 10 million sets. What happened in the past two years? European factory closures and high global inflation rates. In the first quarter of 2022, the Russian-Ukrainian conflict began, which brought not only a series of chain reactions after the rise in crude oil and crop prices, but also the closure of several factories. Due to operational difficulties, leading companies have withdrawn their production capacity from Russia, resulting in obstruction of the supply of winter tires and all-season tires in Europe.
And local factories in Europe are affected by high inflation rates, costs have increased sharply, and production efficiency has declined. In order to balance profits, many foreign tire companies have also implemented permanent closures of production capacity in the Czech Republic, Germany, the United Kingdom and other places in Europe, resulting in further deterioration of local production capacity supply in Europe. Even without factory closures, the prices of tires produced by European factories continue to rise under high inflation. European drivers, who are already tightening their wallets due to high inflation rates, have gradually turned their choices from high-priced tires in Europe, the United States and Japan to high-cost-effective tires in China. In 2023, when many European, American and Japanese tire brands encountered sales difficulties in Europe, Chinese tire brands directly entered the rush mode in Europe, which also explains why the European market share of Chinese passenger car tires can reach 71.2% in 2023.
In 2024, the replacement demand for European passenger car tires and light truck tires has shown a trend of recovery, which also makes the local tire industry more worried-will the market share of Chinese tires become higher? Judging from the tire import volume in the first half of 2024, this worry is not redundant. In the first half of 2024, the total import volume of passenger car and light truck tires in Europe increased by 10% compared with the same period in 2023. Higher import volume means that the market share of Chinese tires in this market segment may be even higher. However, it is worth noting that Chinese tires are not without competitors in the European market. In the first half of 2024, Europe's imports of Korean tires increased significantly.
In the European truck and bus tire market, the market share of Chinese tires still maintains a very high market share.
In 2023, although European truck and bus tire imports are lower than the average level in 2022, at 6.6 million, it is still about 16% higher than in 2021. European truck and bus tires experienced a huge decline in replacement demand in 2023.
The decline in replacement demand and the high import volume mean that a large proportion of sales in the European truck and bus tire market in China and South Korea are replaced by imported tires. And a large proportion of these imported tires come from China. Therefore, in order to curb the expansion of Chinese truck and bus tire sales in the European market. On August 27, 2024, the UK Trade Remedies Administration (TRA) decided to continue to implement anti-dumping and countervailing measures on truck and bus tires imported from China. The new anti-dumping and countervailing duty rates range from £10.03 (RMB 94.73) to £110.11 (RMB 1040) per tire.
Public data shows that in fact only Hankook Tire needs to pay a tariff of 10.03 pounds per tire exported from China; other exporters will pay a tariff of 110.11 pounds per tire. According to ETRMA's tire import report, although the anti-dumping and countervailing duties have played a role in the expansion of Chinese truck and bus tires in Europe, they have not yet solved the problem of a large number of cheap tires occupying the European truck and bus tire market. In 2017, before the anti-dumping and countervailing duties on Chinese truck and bus tires, Chinese tires accounted for more than 70% of the truck and bus tires imported into Europe; after the anti-dumping and countervailing duties were implemented, Europe's imports of Chinese truck and bus tires fell by 75%, but starting in the same year, Asian countries' exports to Europe continued to increase.
In 2023, Europe's imports of truck and bus tires from Thailand and Vietnam will soar to 3.5 million sets from 200,000 sets in 2017. However, unlike the passenger car tire market, Korean tires are still no match for Chinese tire companies in this market segment. In 2024, the sales of truck and bus tires imported from Japan and South Korea are declining.