Affected by the new crown pneumonia epidemic, the overall demand for automobiles in the domestic market has decreased, which is a huge test for the tire industry, which is already under the Sino-US trade dispute. Compared with the automobile market, the global epidemic has a more profound impact on the tire industry.
Judging from the tire export data released by the General Administration of Customs recently, in April, China's rubber tire export volume was 370,000 tons, a month-on-month decrease of 230,000 tons, a year-on-year drop of 33.5%; the export value was 5.896 billion yuan, a month-on-month decrease of 3.513 billion yuan. , A year-on-year decrease of 34.1%.
Regarding the current situation of the tire industry, researcher Liu Youhua said in an interview, “The main problem facing the industry is industry demand. Affected by the epidemic, the number of foreign orders has plummeted. Although domestic demand has recovered, it still takes a long time. Recovery will still affect the uncertainty of overseas markets."
According to statistics from reporters, many domestic listed tire production companies are expected to lose money in the first half of this year.
In this regard, Liu Youhua believes that “performance pressure is predictable. Tire consumption attributes are strong, and new car sales are sluggish. While the resumption of work and production in China tends to be normal, in the short term, there is the possibility of imbalance in the supply and demand market, but in the long term , China’s car ownership still has room for double growth, that is, the domestic demand market will become the main form of inventory digestion.”
New challenges in the climbing period
"The outbreak of the new crown pneumonia epidemic in early 2020 has brought severe challenges to China's tire industry, which is undergoing transformation and upgrading. Large-scale shutdowns of enterprises, personnel and logistics are blocked, raw and auxiliary materials, materials and finished products are not transported smoothly, and market supply and demand The relationship is more complicated. Since March, the global pandemic of the new crown pneumonia has increasingly serious social and economic impacts. The continued spread of the epidemic has caused large-scale shutdowns in many countries. Business interruption is one of the difficult challenges facing the industry at present. At present, more than 100 tire factories around the world have ceased production. From an industry perspective, due to the spread of the global new crown pneumonia epidemic, automobile manufacturing and other industries will inevitably suffer huge losses. The tire industry as a physical manufacturing industry has been severely affected by the epidemic. In 2020, we will do our best Under the premise of good epidemic prevention and control work, survival and development will become the main theme of the industry.
A listed company specializing in tire production introduced in its annual report. Starting from mid-to-late March this year, foreign tire merchants have adopted the method of canceling and postponing orders in response to the crisis brought by the epidemic, causing tire exports to encounter "Waterloo". Zhongnan Finance Pan Helin, Executive Dean of the Institute of Digital Economy of the University of Political Science and Law, analyzed in an interview with a reporter from the Securities Daily that the overseas epidemic has had a great impact on the tire industry. From the current point of view, it is difficult for China's tire exports to return to normal levels in the short term. , The domestic market competition is gradually "white-hot." The entire production capacity is difficult to digest by the domestic market alone, and tire companies will face huge challenges in the future.
According to relevant statistics, in the first four months of this year, China’s cumulative export volume of rubber tires was 1.73 million tons, a year-on-year decrease of 14.3%, an increase of 7.2 percentage points from the first quarter’s decline; the cumulative export value was 27.581 billion yuan, a year-on-year decrease of 17.4% , An increase of 6.1 percentage points from the decline in the first quarter.
Industry knockout starts
In 2019, the tire industry has accelerated its structural adjustment, and the industry concentration has further increased. Transformation and upgrading have become the key words of the industry.
Specifically speaking of the current situation facing the tire industry, Pan Helin said: “Currently, the tire industry has excess tire production capacity. The homogenized products are relatively serious, and the overall market competitiveness is not high, because the downstream demand of the company's industrial chain is not strong. In the past few years, the entire automobile industry has been sluggish and automobile demand has fallen. If the international market declines severely and domestic production capacity is relatively excessive, some companies will be eliminated."
Regarding the future of tire companies, Shen Meng, executive director of Chanson Capital, said in an interview that traditional tires belong to a mature technology industry with low added value and fierce competition. Therefore, the technical content is increased and the new technologies such as smart tires and safety tires are upgraded. Direction transformation is the starting point to increase product profitability and expand competitive advantage.
"The key to transformation and development and the way out for enterprises lies in technological upgrading and promoting industrial upgrading, such as going overseas, building factories overseas, accelerating global expansion, etc. Companies with abundant cash flow, leading technology in the industry, and strong ability to integrate industry resources are expected to stand out.
