· Domestic tire companies are vying to go public

On September 19, 2016, Jiangsu General Technology Co., Ltd. will be listed on the Shanghai Stock Exchange.
This is the third tire manufacturer in China that has entered the market since 2016.
On July 6th and September 9th, 2016, Linglong tires and triangle tires were listed on the Shanghai Stock Exchange. Both companies are from Shandong, a major province for tire production.
In such a short period of time, three tire companies have been listed and traded. This has caused widespread concern about the domestic tire industry.
The data on the steady development of the industry shows that the overall growth rate and income growth rate of China's tire industry has slowed down in the past five years.
However, this has not changed the reality that the entire domestic tire industry is still developing steadily.
According to the statistics of China Automobile Industry Association and China Rubber Industry Association Tire Branch, the average annual compound growth rate of domestic automobile production and sales reached 18.37% and 18.23% from 2001 to 2015, and the average annual compound growth rate of automobile tire production during the same period. It reached 14.55%.
At the same time, as the development of the global automobile industry tends to be stable, the export volume of China's tires has increased year by year, accounting for about 50% of the total output.
According to analysis, the rapid development of China's tire export market is closely related to the stable development of the domestic economy and the automotive industry.
With the continuous growth of domestic market demand, the global tire industry has shifted to China. In recent years, China's tire industry has expanded rapidly, and China has become a world tire production country.
According to statistics, as of 2015, the annual output of Chinese tires reached 565 million, ranking first in the world.
At the same time, among the top 75 global tire companies, Chinese companies accounted for nearly half of the total, reaching 34.
Among the tire companies listed in 2016, the triangular tires ranked 15th in the world, and the exquisite tires ranked 20th, ranking among the top three domestic tire manufacturers (excluding Pirelli, which was just acquired by Chinese companies).
Unpredictable changes However, things suddenly changed.
It has been found that since 2014, domestic tire companies have begun to complain.
One of the important reasons for this is that the tire industry has turned from profiteering to a "normal" of profits.
In the tire companies that grew by as much as 60% or more in previous years, sales revenue generally declined.
The domestic macroeconomic adjustment and the development speed of the automobile industry tend to be “normal”, which has greatly affected the tire industry in the industrial chain.
When most companies have just adjusted their mentality and gradually accepted this "normality", they suddenly found that the tire export market that has been smooth sailing for many years has also begun to face heavy losses.
Headed by the United States, more and more countries have joined the ranks of anti-dumping and countervailing duties against Chinese tires. Under the "double-reverse" bombings of various countries, China's tire export volume and price fell.
Although more and more companies have entered the ranks of the world's top 75, people have to admit that the strength of Chinese tire companies is not strong, and more companies are participating in market competition by playing "price wars."
According to statistics, the sales revenue of the top three tires of China has just surpassed the fifth place in the world.
Blind investment and local protection have led to an oversupply of production capacity in this industry, especially in the low-end production capacity.
In stark contrast to the number of companies and capacity, China's tires still lack strong and famous brands. In the case that product performance and quality are not inferior to foreign brands, the market prices are very different.
According to industry analysts, under the above background, domestic tire backbone enterprises are competing for listing, on the one hand, solving the problem of capital needed for market expansion, and on the other hand, accelerating the rapid integration of financial capital and industrial capital.
This provides an important foundation and prerequisite for Chinese tire companies to go global through branding.

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