Recently, Guohai Securities released a research report on China's tire industry.
The report states that with the gradual saturation of the low-end market, the shift of domestic tires towards the high-end market has become an irreversible trend.
This transformation tests the comprehensive strength of companies in terms of product quality, channel coverage, and brand recognition. It also signals higher industry barriers and greater potential returns.
Two key indicators for this transformation are the counter-trend rise in comparable gross margins and breakthroughs in the high-end automotive supply market.
It is predicted that by the end of 2025, China's overseas tire production capacity will still have some room for growth compared to the U.S. market.
Domestically, tire production capacity has considerable growth potential compared to the European market.
The market for domestic semi-steel and full-steel tires, driven by the automotive industry, is expected to recover.
The consumption of full-steel tires in China is projected to reach 78.97 million, 81.40 million, and 83.75 million units in 2024, 2025, and 2026, respectively, showing year-on-year growth of 4.62%, 3.07%, and 2.88%.
The consumption of semi-steel tires is expected to reach 336 million, 360 million, and 383 million units in the same years, with year-on-year growth of 7.57%, 7.05%, and 6.51%, respectively.
