Rapid development of new energy vehicles in China

China’s rapid development of new energy vehicles, the tire industry ushered in a deep reform. The market is surging, behind the car price war, what opportunities and challenges do Chinese tires face?

  1. Domestic cars drive the growth of domestic original tires

 As we all know, when car companies choose the original tires, they will give priority to their own national brands. Like BYD’s Qin PLUS, Dolphin, Seagull, Song PLUS, Yuan PLUS; Aian AION S, AION Y; Wuling Hongguang MINI, Bingo and other popular models, are originally equipped with domestic tires.

With the domestic cars in the market, the original market share of China’s tires continues to increase, and even some top brands said that the product supply is in short supply.

2, the price war may increase the share of domestic tires

 As the car price war continues, some models may consider reducing the tire budget and choose domestic tires. Domestic tire price is lower, and the quality is also reliable, or will be selected by more and more car enterprises.

At the same time, with the profit of car enterprises, the after-sales market has become the focus of profit growth. Oems will strengthen cooperation with 4S stores and auto service chains to launch maintenance packages. Domestic tire profit margin is larger, may become the focus of attention.

  1. Promote the growth of tire replacement rate

 Compared with traditional fuel vehicles, new energy vehicles are distorted, faster and heavier body, resulting in faster tire wear.

Industry insiders said that traditional fuel vehicles generally about 6 years to replace tires, and new energy vehicles will change tires in 4 or 5 years.

  1. Boost the transformation of the high-end development of tires

 New energy vehicles are becoming more and more high-end, with higher requirements for tire silence, wear resistance, comfort and other performance, and their size is generally larger. At present, many 100,000-class domestic new energy cars, using the BBA luxury car will be used with 19-inch tires.

In addition, the appearance of new energy vehicles is more design sense, but also put forward higher requirements for the appearance of tires. Therefore, the development of new energy vehicles, is forcing China’s high-end tire transformation.

  1. Export drives Chinese tires to the world

 China’s automobile export volume exceeded 5 million units in 2023, making it the world’s largest automobile exporter. Many domestic new energy vehicles are equipped with domestic tires, to a certain extent led Chinese tires “go out”.

Therefore, in order to adapt to foreign tire laws and regulations, improve market recognition, many Chinese tire enterprises increase investment in research and development, accelerate product performance and quality, the industry into a virtuous cycle.

 Tire industry, the price war can not play out of the future

 Like the auto industry, the tire industry has also been facing an “inward roll” situation in recent years. But the difference is that Chinese car companies have overtaken foreign brands through new energy vehicles; while Chinese tires lag far behind foreign brands in research and development and product strength.

 This also means that the price war in the automobile industry is based on the power of domestic new energy vehicles, through the early configuration of the volume, there is today’s volume price. This forces foreign car companies to give up profit margins, while product upgrades, is good for consumers.

 And the price war in the tire industry, the strength of Chinese products does not pose a threat to foreign capital, just a simple low price competition. As a result, some small and medium-sized tire enterprises can reduce costs to make quick money, give up medium and long-term development, product strength has not improved, and gradually lose the trust of consumers.

 Backward is not terrible, terrible is to do not want to forge ahead.Brand power, marketing power and so on all, are built on the product, and the product is our weakest and most backward link.

 Fortunately, at present, the domestic head tire enterprises have awakened, began to focus on product research and development, digital, intelligent manufacturing and other fields, and launched high-end products with excellent performance.

2024 and even the future is an era when products are king and technology is king. Low price is not necessarily the way out, but excellent products are the cornerstone of market recognition. I hope that the tire industry can seize the opportunity, high-quality development, follow the automobile industry, and create a story made in China!

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