Billions of dollars poured into the tire industry

Have you noticed that investment in the tire industry is becoming more and more exaggerated? Starting from 2023, the global capacity investment amount is often billions, and the capacity landing plan is often tens of millions.

Such large-scale construction is not only for traditional tire giants, but also for many tire "new stars" established in 2023 and 2024.

7 tire companies invested more than 40 billion
According to incomplete statistics, from 2024 to 2025, China's tire industry ushered in at least 10 "investment giants".

In 2025, Shandong projects under construction accounted for 2. The latest of them can be counted as Shandong Maisega Rubber. This company, which intends to make a new name in the tire industry, was registered in the first half of last year.

However, it is consistent with the investment law we mentioned at the beginning of the article-the shorter the establishment time, the more daring the investment amount. Shandong Maisega Rubber was established less than a year ago, but it has invested a huge sum of 3 billion yuan in Pingdu City, Qingdao, Shandong, for a capacity investment of 10.7 million.

This also means that the investment amount for buying one million tires is about 28 million yuan. However, this investment "money" still does not rank first on the "lavish spending list". The first and second places on the list are still two 10 billion investments in 2024 - Kubisen Tire and Huaqing Petroleum's tire project investment in Hunan. The total investment amount of the former is not rivaled by any company, and the investment amount per million production capacity of the latter is so high that it is "fault".

At the beginning of 2024, Kubisen invested 10 billion yuan in the Chinese tire industry, becoming the largest investment in the Chinese tire industry in the past decade. According to the plan, this 10 billion yuan investment will be used to build 30 million sets of semi-steel radial tires and 3.5 million sets of full-steel radial tires. This also means that the investment per million production capacity of the project has reached nearly 30 million yuan.

In 2024, Shanghai Huaqing Petroleum Development Group Co., Ltd. plans to invest 9.8 billion yuan in the "High-end Tire Flexible Intelligent Manufacturing Green Technology Industrial Park" in Yongzhou, Hunan.

On December 26 of the same year, the project started construction with a total investment plan of 21.75 million sets of high-end tires. Calculated, the investment amount per million production capacity exceeds 45 million yuan. The investment in million production capacity in 2024 is the highest. And this is not the only tire investment considered by Huaqing Petroleum. Huaqing Petroleum also examined the feasibility of investing in tire projects in Northeast China in 2023. In the same year, it signed a framework agreement for high-end tire project investment with Qianguo County, Songyuan City, Jilin Province. The plan at that time was to invest 10 billion yuan to build an annual production capacity of 20 million sets of tires. The investment amount of one million production capacity of this project reached about 50 million yuan.

In 2024, the total investment amount of the Yellow River Tire's annual production of 58,000 sets of special tire construction projects was also 929 million yuan. Although it did not reach the billion investment mark, the investment of more than 900 million was only for the production of 58,000 tires.

In the eyes of many people in the industry, this investment amount is still quite exaggerated. In fact, the investment amount in the tire industry in the past two years can really be described as explosive-there is no highest investment in buying a million production capacity, only higher.

Tens of billions of dollars, terrifying tire investment
Looking at the investment of foreign tire companies in China and the construction of overseas production bases of Chinese tire companies, you will find that the investment in building a tire factory has reached astronomical figures.

This is why the leading companies have been more cautious in investing in the past two years. In 2023, even two listed tire companies stopped their capacity investment. Even if they decide to invest money, compared with emerging tire companies, traditional Chinese and foreign "big factories" are also cautious.

The first investment in Kunshan in 2023 came from Goodyear, with a total investment of US$200 million (approximately RMB 1.3 billion), and a planned production capacity of 2.6 million passenger car tires, with an investment of RMB 520 million per million of production capacity; the total investment of the fourth phase of Continental in Anhui is 1 billion euros (approximately RMB 7.867 billion), and the planned production capacity is to achieve an annual production capacity of 18 million passenger car tires and light truck tires by 2027, with an investment of RMB 437 million per million of production capacity.

Michelin's Shenyang plant invested 100 million yuan to add 3.5 million passenger car tires, and the investment amount per million production capacity exceeded 28 million yuan. Bridgestone's investment in the Wuxi plant reached about 562 million yuan, and it is committed to further promoting ENLITEN® technology to more tire product lines and expanding the production capacity of high-end passenger car tires.

Sailun's attempt at North American production capacity, namely the construction of a 6 million semi-steel radial tire project in the Mexican plant, has also increased its investment amount to 240 million US dollars (1.742 billion yuan) in the subsequent promotion, and the investment amount per million production capacity is about 290 million yuan.

Linglong Tire's total investment in Serbia is about 4.621 billion yuan, with a total production capacity of 1.1 million sets. Wanli Tire's investment in Cambodia has reached 1.751 billion yuan, with a total production capacity of 11.2 million tires, and the investment per million production capacity has reached 156 million yuan. The investment amount of tire production capacity is high.

However, the investment purposes of old tire companies and emerging tire companies are quite different. For example, the top ten Chinese tire companies are more willing to invest in overseas bases to achieve the goal of localized operations in overseas markets.

However, with such an exaggerated investment amount, it is difficult for tire companies to complete it by "one's own strength". Therefore, even tire giants that earn tens of billions or hundreds of billions every year still need to rely on the power of capital to complete production expansion, or at least rely on loans to support investment. Public data shows that the proportion of loans for overseas base construction of leading companies has reached 70%.

So where do emerging tire companies with unknown brand influence raise money to build factories? The answer is clear, relying on capital. Just like the way that Wuchan Zhongda reshaped the bankrupt Dongying Tire Factory through acquisition, more and more supply chain companies are entering the tire business by investing in tire companies.

Capital giants, backdoor listing in the tire industry
For example, Tianji Tire, which has made a 2 billion investment plan in 2024, is the predecessor of the bankrupt Haoyou Tire. After several rounds of equity adjustments, its equity is now completely controlled by Zhejiang Xuanzhuo Supply Chain Management Co., Ltd.

It is reported that under the planning of its shareholders, Henan Tianji Tire has signed a merger agreement with Embrace Change Acquisition Corp, a US-listed company, and plans to complete a backdoor listing in the middle of this year.

Another investment giant, Huaqing Petroleum, has its own amazing capital strength. This company is affiliated to the Tenth Oil Production Plant of Changqing Oilfield in China, and its business scope includes intelligent manufacturing and automotive supply chain. Sichuan Tianhai Zhongneng Energy Co., Ltd. holds a 70% stake.

It can be seen that one of the key factors for the emergence of so many giants in China's tire industry in 2024 is the entry of capital giants. But can capital really get the dividends of the tire business (Chinese tires have been carnivaling around the world from 2023 to 2024).

Only 20% of the production is put into production, and the giants are in doubt about the development
From the current industry feedback, most investment giants have only left the shore at present-most tire projects have only one phase in production at present.

Take Kubisun, the largest investment in 2024, for example. Although it took less than a year from digging the foundation to putting it into production, in fact, only the first phase of the project has been started, that is, 15 million sets of semi-steel tire production capacity has been put into operation, accounting for about 45% of its total production capacity plan. And this is the fastest-progressing tire company. The 7 major tire investment giants mentioned at the beginning of the article have a tire production capacity plan of up to 134 million tires, which is less than 20% at present.

The more serious question is, who will sell these tire production capacities? How to sell them? We have not seen more specific plans yet. Around 2000 was the bonus period for entering the tire business, around 2010 was the micro-profit period for entering the tire business, and around 2020 was the period of entering the tire business...