The secrets of China's tire market: Challenges behind the prosperity

As one of the world's largest tire production and consumption markets, the development of China's tire industry has always attracted much attention. But it is really hard to say what China's tire market is like now. Today, Tire Business will unveil the veil of China's tire market with you and take a look at the story behind this huge industry.

China, huge tire production scale
There are many tire factories in China, like stars scattered all over the country. It is understood that there are currently 337,851 tire-related companies in the country, which is a huge number! Shandong, as a gathering place for tire companies, is the leader with 143,794 companies. Other provinces are not to be outdone and have laid out tire industries.

Let's talk about production capacity, which is even more amazing! In 2023, China's rubber tire outer tire production reached 987.754 million, ranking first in the world, accounting for 56.46% of global tire sales, which can be said to be unmatched. This is like a marathon race for global tire production. China is far ahead of other countries.

Foreign-funded tire companies gradually withdraw
Once upon a time, foreign-funded tire companies were in great demand in the Chinese market. Since 2000, they have been expanding their production capacity, with an annual production capacity of about 260 million passenger car tires.

International brands such as Bridgestone, Michelin, and Goodyear have taken the initiative in the Chinese passenger car tire market and have established their own tire factories in various parts of China. Some companies even have more than one factory, and have firmly established their roots through the layout of brands and production capacity.

However, the current situation has changed dramatically. On February 14, 2025, Tongyiou made a bold decision to sell 86% of the shares of its Chinese subsidiary to Liaoning Hengdasheng Investment Co., Ltd. On February 27, 2024, Bridgestone announced the termination of its commercial vehicle tire business in China; on August 17, 2022, Dunlop also decided to stop the sales and production of truck and bus tires in the Chinese market from January 1, 2023.

Yokohama, Kumho and others gave up the Chinese truck and bus tire market earlier. Giants such as Michelin and Goodyear are also struggling in this field, and their sales continue to decline. Foreign-funded enterprises that once dominated the Chinese market are now fleeing one after another, and foreign-funded tire companies are gradually withdrawing from the Chinese market.

The domestic tire market is fiercely competitive
In fact, the domestic tire market is more competitive than you can imagine. Many tire companies have invested in expanding production, and the number of tires on the market is in oversupply. It's like a fierce war, with all parties scrambling for a limited market share, resulting in frequent price wars and continuous compression of profit margins.

In order to survive in this competition, domestic companies have to desperately reduce costs and increase production capacity, while foreign-funded companies have always disdained to join the price war in the domestic market, which leads to their "disadvantaged" position.

On the other hand, with the continuous advancement of technology in Chinese tire companies, the quality and performance of domestic tires are getting higher and higher, and the cost-effectiveness advantage is prominent. Take commercial vehicle tires as an example. As means of production, users pay more attention to cost-effectiveness.

The quality of Chinese tires is getting better and better, but the price is relatively affordable, while the prices of foreign brands are still high, and they cannot compete with Chinese tires in terms of cost performance. This has caused them to gradually lose their advantages in market competition and have no choice but to withdraw.

For Chinese tire manufacturers, the competitive pressure in the domestic market has also made them begin to re-examine their development strategies. The focus of the layout has shifted from simply pursuing market share to increasing product added value, striving to create "unique" products, and increasing product prices and profits.

The future path of Chinese tire companies
Despite facing fierce market competition, Chinese tire companies are also constantly exploring new development opportunities. With the rise of new energy vehicles, the tire industry has ushered in new changes.

The performance requirements of new energy vehicles for tires are different from those of traditional fuel vehicles, which provides Chinese tire companies with an opportunity to overtake on the curve.

Many domestic companies have begun to increase their investment in the research and development of new energy vehicle tires, establish strategic partnerships with mainstream automakers, and jointly promote the localization process of the new energy vehicle industry. The Chinese tire market is full of opportunities and faces severe challenges.

In the future, whether Chinese tire companies can stand out in the fierce market competition and occupy a more important position in the global tire market, let us wait and see.