Will The Chinese Tire Market Slow Down Due To Regulatory Policies?

Will The Chinese Tire Market Slow Down Due To Regulatory Policies?

Driven by increased sales of passenger and commercial vehicles and strong demand for replacement tires, By the IMARC group the global tire (Tyre) market reached a volume of 2,268 Million Units in 2021. Looking forward, IMARC Group expects the market to reach 2,665 Million Units by 2027, exhibiting a CAGR of 2.8% during 2022-2027. Currently, China represents the world’s largest tire market, accounting for around 42% of the total global demand. The automotive industry has grown at an incredible pace which further propelled the development of this market in terms of production as well as sales. According to a recently published report from IMARC Group on the global tire market, it was found that the tire market in China reached volumes worth more than 1.2 billion units. With a rising population, growing standards of living, and increasing disposable incomes, the purchasing capacity of the people has improved which is ultimately driving the demand for tires in China. Moreover, new technological advancements in the tire industry and an increase in R&D investment have further enhanced the market competitiveness. The government is now shifting its focus toward high-quality tires that are fuel-efficient and less prone to CO2 emissions. An increasing number of tractors/trailers with powerful engines for agricultural purposes, highway development, and increasing demand for tubeless tires in domestic as well as export markets has helped in the development of the automotive and tire industry in China.

China is also a leading exporter of tires to the USA and UK. The country has the largest car parc and still shows growth potential in the domestic tire market. The continuous rise in the number of vehicles, however, has persistently gained the attention of the government and the concerned authorities regarding the rising pollution and the problem of congestion on the roads. Vehicle population and their emissions have posed the challenge of maintaining air quality all over. As a result, the government has imposed vehicle emission control strategies time and again. Some the cities like Shanghai and Beijing have implemented car ownership control policies and made efforts to restrict vehicle registration and their use. Moreover, the sales of new cars are on the wane while the sales of used cars are increasing. As a result, automobile sales in China are slowing down which in turn is affecting the sales of the tires.

The Chinese tire market faced another challenge when the US and European Union changed their trade policies and imposed tariffs to limit tire exports from China. Despite such challenging trade conditions, the Chinese government has taken steps to maintain its global position in the tire market. This includes improvement in their product performance and measures to expand their exports to other regions.  Regardless of the challenges, the Chinese tire market has numerous opportunities and shows great potential for further growth both in the domestic and non-domestic regions. The market will continue to grow at a rapid pace as projected till the end of the year 2021.

According to the IMARC group’s report titled “Tire Market – Industry Trends, Manufacturing Process, Plant Setup, Machinery, Raw Materials, Cost and Revenue” the market has been segmented on the basis of application. Currently, passenger cars represent the largest segment for tires in the total tire market in China followed by trucks. Mapping out the competitive landscape, the market is highly fragmented with hundreds of manufacturers competing with each other. Currently, Hangzhou Zhongce represents the largest player followed by Triangle Group, Double Coin Holdings, Shandong Linglong, Xingyuan Tyre Co., and Aeolus Tyre Co.

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About IMARC Group: IMARC Group is a leading market research and consulting company that offers management strategy and market research worldwide. The company has done multiple projects in the global tire industry and region-wise in India, Russia, Europe, North America, GCC, Asia Pacific, Europe, Saudi Arabia, and the United States which has enabled clients to set up and expand their businesses successfully.

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