Appeals Long Market Implications Serious Tire Firms Cannot Help Hong Kong

Recently, the China Rubber Industry Association has proposed to continue to respond to "tire special protection case", can the special security case "overturn the plate"?

It has been nearly two months since the results of the United States Tyre “Special Protection Case” was announced. The negative impact it has brought is even more serious than imagined. The data released recently by Huangpu Customs shows that, as the largest market for tire exports from Guangdong, the number of tires exported to the United States plummeted by 32%, and exports to other third world countries also fell by more than 20%, while exports to Hong Kong have risen inversely by 18%. . According to Guangdong tire export leading enterprises, the sales volume in the United States exported to the US market has hit a record low. Even if some tire companies adopt the curve to save the country and re-export from third parties, it will be difficult for the overall situation.

Since the China-US Tire Special Safeguard case still needs to be negotiated under the WTO framework within 2 months from the effective date, the review can only be conducted after 6 months. Therefore, even if there is a possibility of "overturning," it will at least wait until after May 2010.

Exports fell 32% year-over-year in the first three quarters of the United States

According to data released by the Huangpu Customs recently, in the first three quarters of this year, nearly 29 million pneumatic tires were exported from Guangdong, a decrease of 22% over the same period of last year. Among them, more than 9.5 million tires were exported to the United States, a decrease of 32%, accounting for the total export volume. More than 30% of the total exports to Africa, the European Union, and Latin America have fallen by more than 20%. After October, with the arrival of the off-season tire sales season, some local tire companies have even worsened, and domestic sales have also fallen by more than 10% year-on-year.

According to the reporter's knowledge, many local tire companies suffered a sudden drop in the US product shipments last month after the special security case. Among them, Wanli Tire's export of tires to the United States after the special security case set a new low in its export history. “At present we are adjusting our sales ratio between inside and outside the tire from 4:6 to 6:4, and we have tires and cards for passenger cars. The management of the sales and management of passenger car tires has been completely separated, and we hope to focus on opening up the local market.” Zhang Jianping, director of planning division of Wanli tires, said that at present, Wanli Tire is cooperating with the business model to sell large numbers of stores for local chain stores. The internet.

Another big tire manufacturer, Zhongze Tire, which was exported to the United States, was seriously damaged after the results of the special safeguard case came out. Su Yongming, the manager responsible for the overseas sales of products, made it clear that the sales volume in the United States in the past two months has dropped considerably.

Helpless to digest inventory in Hong Kong at low prices

While the decline in exports to Europe and the United States was significant, local tire companies’ exports to Hong Kong rose by 18% to nearly 3 million. In response, Li Dahua, an adviser to the Guangzhou Automobile Industry Association, pointed out that this was mainly because after the “special security case”, domestic tire companies could only abandon the original “direct trade” approach to the US market and instead purchase through agents in third-party regions. Enter the US market. As a result, domestic tire companies’ export product pricing has become subject to human control.

The sudden drop in exports after the tires' special security case has caused domestic tire companies to have a dilemma of overcapacity. Some of the company's products even have a large stockpile of inventory, which has caused the liquidity of the company to be difficult to turn around. But unfortunately, it has to switch to exports through low prices. It can be said that this is the last resort that some companies have taken in order to solve the backlog of products.

Prior to this, some domestic tire companies will move to factories in Laos, Vietnam, Cambodia and other countries with lower labor costs to achieve the goal of reducing production costs. However, in practice, due to insufficient preparations for the preliminary work, there is still a large gap between the local infrastructure facilities and the domestic industry, and the technical and quality training of local employees is not satisfactory. Some tire companies in China have found that setting up factories in these ASEAN countries has not achieved the desired production efficiency and the quality of products is not satisfactory. As a result, a great deal of manpower and material resources are lost, and production costs have risen.

The complaint cannot be resolved within half a year

It is to take into account the huge impact of the special security case on Chinese tire companies. At the recent National Rubber Industry Information Conference, various companies reached a consensus to prepare a joint appeal for a special case of tire protection. Deng Yaxi, secretary general of the China Rubber Industry Association, said that the current results are still difficult to predict. It is understood that since the Sino-U.S. tire special protection case will still be negotiated within the framework of the WT O within 2 months from the effective date, the review will be conducted only after 6 months. Therefore, even if there is a possibility of "overturning," it will at least wait until after May 2010.

For domestic companies preparing to continue to file complaints, Su Yongming, manager of overseas sales for ChinaSteering Tire, also feels that the problems facing the company in the short term cannot be solved. As for China Strategic tires, it is only possible to adopt price increases for the time being, in an effort to reduce the impact of the special security case.