BEIJING—China's tire production and sales volume recorded the first drop in more than two decades in 2018, against the backdrop of the first global downturn for the automotive industry in the past ten years.
The first two months of 2019 saw an even sharper year-on-year decline in the China market, Shen Jinrong, chairman and general manager of Zhongce Rubber, said during her speech at the China Rubber Conference held in Guangzhou in March.
According to data from the China Rubber Industry Association, the country's tire production fell by 0.8 percent year-on-year to 648 million units in 2018. Radial tire production fell by 0.7 percent to 609 million.
"You cannot overstate the graveness of the drop in China's domestic consumption," Shen said.
In 2018, China's tire makers had $479 million in profit on $25 billion revenue.
"What you are seeing as the sector's profit also covers the manufacturers' non-main business, without which there's basically no profit," he said.
The U.S. and Europen Union anti-dumping tariffs also are casting heavy shadows as more than 40 percent of China's tires are exported with the two markets accounting for a significant share, he added.
According to CRIA, China exported 5.4 million metric tons of tires last year. Forty percent of the passenger car tires, which totaled 2 million tons, were sold in the U.S. and EU. Of the 3.4 million tons of truck and bus tires exported, 25 percent were sold in those markets.
Faced with such headwinds, CRIA estimates that China's truck and bus tire production in 2019 will fall by 13 percent to 116 million units, when compare to 2018.