Chinese domestic manufacturers need to develop production facilities

Domestic tyre manufacturers in China are lagging far behind multinational counterparts in the country, according to a report by Research and Markets.

The Irish research group estimates output by domestic players in 2003 was approximately 410,000 tyres, while foreign companies made 2.7m tyres in China.

The group says: “To fulfil its ambition to become the main base of operations for leading foreign auto companies, it is imperative that China develop a world-class tyres industry. In doing so, the country would become more attractive to leading automakers.”

Although China’s tyre sub-sector has developed on the back of the automotive sector’s rapid growth, Research and Markets says car makers would be attracted by high quality tyre production to displace costly imports.

Domestic tyre manufacturers are financially weak, which explains why their investment in R&D facilities id lower than that of multinationals. They also lack co-operative synergies in areas of purchasing and R&D. “It is imperative that domestic tyre companies rectify these weaknesses by developing more sophisticated production techniques.”