China is one of the world's biggest tire producers. Its annual output has reached 420 million sets, occupying 1/3 of the world's production capacity. Statistics shows that until 2015, China's tire production will be raised to 570 million sets.
As more and more global tire producers transferring to Asia Pacific, we target China’s tire industry at “medium or long-term attention”.
Opportunities in China's tire industry mainly stem from the following two aspects:
1. Favorable investment environment.
Chinese government supports the development of tire enterprises, and the corresponding companies have become skillful in striving for fairer trade environment.
Especially, after China's tire industry won the lawsuit against U.S. DOC, we believe that America, the most importan market in North America Area, has opened its door for China’s tire producers. China’s tire export will face a new round of growth in the near future.
At the same time, an apparent trend, that global tire manufacturers transfer to Asia Pacific region, exerts a favorable impact on the outstanding domestic tire enterprises on long term. A better investment environment is taking shape.
2. Enormous vehicle population
According to data released by the Ministry of Public Security Traffic Control Board, China possess 219 million units of vehicle by the end of August 2011. Amongst, there are 119 million units of motorcycle, taking 54.12% of the total number. And China’s automobile exceeds 100 million units, occupying 45.88%, which shows that China has become the second biggest auto possessive market in the world.
It is no doubt that China would be the largest tire producers in the future, with such a huge vehicle population. Adding to a stable life cycle of tire industry, which is favored by the conservative investors, it will surly attract more funds into this field, once the investment environment turns for the better.
