Chinese tyres threaten local market

ED RICHARDSON CHINESE-MADE tyres, which are already competing heavily against the South African tyre manufacturing industry, are set to become more of a threat. Local manufacturers include Bridgestone, Continental, Dunlop and Goodyear, while the industry employs an estimated 8 500 people. All four of the manufacturers have aggressive export marketing campaigns, in addition to local sales. According to Trade and Industry statistics, they exported R1,2-billion worth of tyres in 2004. The industry is dwarfed by mainland China, which exported US$3 billion (R20-billion) worth of tyres in 2005 – up 55% year-on-year, according to a recent report by Global Sources. As with tyre manufacturers around the world, the Chinese are having to cope with higher raw material prices. According to the research, 26% of Chinese manufacturers are planning to increase prices by more than 10%. However, they are quickly following the line taken by the established manufacturers by moving up-market. Some 76% of manufacturers interviewed said they would focus on high-performance tyres. “Many manufacturers feel a wider product range is critical to winning orders from overseas buyers. Consequently, they are investing in the development of new tyre models and obtaining necessary certifications,” says Global Sources’ general manager of content development, Michael Kleist. “To avoid competing on price alone, many manufacturers are developing higher-end products including high-performance tyres,” he adds.