The upstream industry of tire industry is the basic chemical industry, and the main raw materials include: rubber, steel cord, carbon black, etc.; the downstream industry of tire can be divided into supporting market and replacement market, corresponding to new car production and old car tire replacement respectively.
Dealers pay more attention to cost performance when choosing brands, while parking lot pay more attention to product quality when choosing cooperative tire enterprises. China's tire brands have advantages in cost performance. To improve the market share of original tires, we need to steadily improve brand awareness and product quality. Based on the background of the big environment, the current tire market is still dominated by matching tires, and the demand is growing.
The current tire demand in the domestic tire market mainly depends on the downstream automobile output and quantity. In the initial stage of automobile development, the market demand is less and the tire sales are blocked. With the gradual increase of automobile quantity, the tire replacement demand far exceeds the matching demand. According to the statistics of China Automobile Industry Association, at present, the downstream market is mainly the replacement market, accounting for about 75% of the total tire sales; the supporting market accounts for about 25%.
There are data showing that the sales volume of the global original tire market has declined. Since 2005, the overall global automobile production and sales volume has shown a steady growth trend. In recent years, it has basically stabilized at the growth center of 3% - 5%. In 2018, there was a negative growth, with the global automobile output of 95.63 million, down 1.7% year-on-year, the first negative growth since 2008 and 2009.
Affected by the epidemic, the sales volume of the car market in 2020 is bleak, and the demand for original tires drops sharply, and the original market once fell into a downturn. However, the decline of the original tire market did not start from this year. Last year, the original tire market has shown a downward trend. Goodyear's 2019 annual report shows that both sales and profits have declined. The total tire sales volume is 155.3 million pieces, down 2% from 2018, down 3.9 million pieces. Among them, the sales volume of the original tires was 40.3 million, a decrease of 3.8 million over 2018, a drop of up to 8%, while the replacement market's tire shipments basically remained unchanged, with sales volume of 115 million, a decrease of 100000 over 2018. The same is true for Michelin. In 2019, the sales volume of original tires was greatly reduced. The original business of passenger car tires dropped by 2% year on year, the original business of truck tires dropped by 3% year on year, and the performance of original business of special tires changed little compared with that of 2018.
Car ownership continued to increase, and the replacement market grew steadily. The global light vehicle tire replacement market demand accounted for a high proportion, with a rapid compound growth rate. Especially in Europe and North America, there is a great demand for replacement market. From the perspective of global tire market, the largest growth is in China, with an increase of 13.5%, almost doubling the speed of overtaking Europe and North America, and there is a huge potential in the replacement market. At the same time, the growth rate of China's car ownership continues to be higher than the global level, which also drives the growth of domestic demand for replacement tires. China is the world's largest passenger car ownership country. As early as 2015, the number of passenger cars reached 136 million, accounting for 14.36% of the global passenger car ownership; the number of commercial vehicles in China is 27.04 million, accounting for 8.07% of the global total commercial vehicle ownership.
The domestic original tire market is sluggish, and the performance of the international tire giants is declining. The domestic tire enterprises seize the opportunity to occupy the market share of the international giants, and the replacement tire takes the opportunity to occupy most of the domestic market, so as to achieve a significant increase in performance. Although the production and sales volume of China's passenger car market has entered a negative growth stage, the absolute value of car ownership is still at a new high. According to statistics from the Ministry of public security, as of June 30, 2019, China's car ownership reached 250 million, approaching the level of 253 million in the United States. China is about to become the largest car ownership country, and also provides a broad tire replacement market for domestic tire enterprises.
In the current environment, tire companies have turned their attention to the replacement market, but the market is like a battlefield, with rapid changes. No one can predict who will dominate the market in the future, just like this sudden epidemic, which will mess up the market. Even though facing more difficulties, tire companies should strive to survive and keep up with the changes in the market Speed, can let the enterprise, the brand better development.
(part of the data comes from the network, editor in charge: Liuying)
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