Nanjing Ninglun Tire Co., Ltd. Is China’s first tire agent listing in the off-the-counter market. What is the company’s unknown consideration after their listing?
（Chen Bin, General Manager of Ninglun Tires)
Helplessness: When Traditional Agent Encounters Bottleneck
Ninglun Tire is the general agent of Chaoyang Tire, Zhongce Rubber, in Nanjing.
Twenty years ago, the annual output of Zhongce Rubber was only 300 million to 400 million yuan.
Today, Zhongce Rubber has become one of the world’s top 10 tire producers, with an annual output value of around 30 billion yuan.
Over the past few years, domestic tire prices went all the way down, sales volumes of the agents kept rising, but their revenues dropped.
One of the key reasons of their revenues drop is growing costs, including those on human resources, warehouse, logistics and taxes.
Profitability is the crucial consideration for an enterprise to survive and develop, according to Chen Bin, general manager of Ninglun Tire.
She believed that traditional agents have entered a bottleneck of development.
Internet has changed people’s lives in every aspect, but tire agents changed little, Chen sighed.
Currently, the costs for developing and maintaining clients are increasingly high, but the management and operating methods of many tire agents rarely change.
They still consider expanding receivables as core competence and take low prices as competitive tactic to maintain clients.
Unwillingness: Resume Entrepreneurship Attitude
Under the circumstance of economic slowdown, many large agents are quitting the market gradually.
Chen also thought about giving up.
The most convenient way for her is selling out the inventory at lower prices, collecting the receivables, paying back the loans, dismissing the staff, and retiring.
But she was unwilling to leave her beloved career like that.
Chen finally made up her mind, walked out of her own world, studied at professional institutes, expanded the structure of her knowledge, and learnt the development tendency of the society.
Seeking for Changes: Exploiting Core Value
In Chen’s point of view, the profits gained by tire agents cannot be represented by the services and value they provided to the up- and down-stream clients.
She said, an agent has no tenure, the products don’t belong to the agents, and technically, the clients don’t belong to the agents. Their agent contracts with the producers are usually annual contracts.
Many thought the Internet has impacted traditional industries. Internet companies in the auto after-market sector showed their customers online. It seems that the value of agents is becoming less and less.
But Chen’s thought went far: as the times develop and technology progresses, it is people’s mind impacting the traditional industries.
Chen has gradually walked out of her identity as an agent.
She was inspired at a commercial class that without the power of capital, an enterprise cannot become strong or go too far. The value of an enterprise needs a platform to show, and capital will be able to price the value of an enterprise.
At that time, the Chinese government was promoting the OTC market and Chen wanted to seize the opportunity.
As Ninglun Tire operates well and it was immediately appreciated by the securities brokers.
With joint cooperation of all the relevant parties, their application was approved by the National Equities Exchange and Quotations on Aug. 31, 2016, and Ninglun Tire officially got listed in the OTC market on Oct. 12, becoming the first domestic tire agent listed in the market.
Chen expects the company will start a second entrepreneurship with capital platform.
She said Ninglun Tire will make full use of the equity to attract talents, technologies, resources and capital, exploiting core value of the tire distribution channel, and create a fresh new Ninglun.
