China tire industry strongly recovered

China’s economy recovered further from the coronavirus in the third quarter, according to data released Oct.19 by the National Bureau of Statistics.

As the world’s second-largest economy, China reported third-quarter GDP growth on the low end of expectations, up 4.9% from a year ago. That brings growth for the first three quarters of the year to 0.7% from a year ago.

Meanwhile, with China's economy recovering from COVID-2019, auto sales and production also increased, which helped domestic tire market grow well in the past three quarters.

China's GDP surged in Q3'

According to China's National Bureau of Statistics, China's GDP reached 72.3 trillion yuan in the first three quarters, yearly increasing 0.7%.

Divided in quarters, China's GDP growth year-on-year declined 6.8% in the first quarter and realized 3.2% of growth in the second quarter.

“China’s return to economic dynamism with a faster-than-peers pace is the first step towards a global recovery,” Bruce Pang, head of macro and strategy research at China Renaissance, said in a note.

While he expects further growth from China, Pang noted that issues such as unemployment, diminished household income and shifting consumer behavior could affect Beijing’s efforts to increase the contribution of consumption to growth. Instead, authorities might be more inclined to rely on investment and exports for growth, which face their own challenges from uncertainty about the global recovery and geopolitical tensions.

Pang pointed out that the services, or tertiary, sector of the economy recovered more slowly than the primary and secondary sectors, which respectively refer broadly to agriculture and manufacturing.

Out of the three categories, the services sector has grown the fastest for the last few years, but has lagged so far in 2020, up 0.4% in the first three quarters of the year versus 2.3% in the primary sector and 0.9% for the secondary.

Fixed asset investment rose 0.8% in the first three quarters of the year, the statistics bureau said Monday.

Industrial production rose 6.9% in September from a year ago, bringing total growth for the first nine months of the year to 1.2%.

Tire production kept sustainable growth

Tire factories' operation ratio has obviously lifted since August. Statistics showed that China produced 77.1 million units of tires in August, yearly raising 13.4%, which is the first two digital growth since June.

In the first eight months, China has realized 501 million units of tires, yearly shrinking 8.4% compared to the same period of 2019. 

So far, China hasn't released tire production datas of September, but journalist from Tireworld predicted that tire production may keep sustainable growth in Spetember after talking with domestic tire companies.

China's auto sale&production creates historical high

China auto outputs and sales reached 2.524 million units and 2.565 million units respectively in September, jumping 14.1% and 12.8% from a year ago, and showing growth for the sixth month in a row, according to the China Association of Automobile Manufacturers (CAAM).

Compared to August, China's auto market also achieved double-digit growth in both Sept. production and sales volumes.

In the Jan.-Sept. period, both auto outputs and sales represented year-on-year decrease standing below 7%.

In September, China's PV sales reached 2.088 million units, rising 8% and 19% compared to the prior-year period and August respectively. The car, SUV and minibus arms all attained year-on-year growth. Notably, the SUV segment achieved its highest-ever Sept. sales. 

The year-to-date PV sales amounted to 13.376 million units with a 12.4% decline, versus the 15.4% decrease in the Jan.-Aug. volume. The sales of SUVs and minibuses dropped slower than that of cars and MPVs.