According to People’s Daily, companies like Michelin and Bridgestone plan to expand their business in China. One effect of these actions will be challenging the domestic tire producers.
"Booming domestic market made foreign companies more confident in their expansion in China, and will lead to more fierce competition in China," said a manager from a domestic tire maker in East China's Shandong province.
Last month, Michelin, the world’s second largest tire maker, announced its intention to build a factory in Shenyang, through a $1 billion investment. The production site is scheduled to become operative in 2012.
Continental AG, Europe’s second-largest tire maker initiated a project in China last September, that is expected to have an annual production capacity of 18 million tires. This required a financial effort of over $810 million.
Other tire-producing companies are following the same trend: Bridgestone’s Chinese arm has announced that it plans to invest in further development on the market. Yokohama targets an annual output of 5.10 million tires. Toyo tires also expressed its intention to invest $9.8 million to build a subsidiary in China.
Predictions for the Chinese tire market show that domestic companies will target the lower segment of the market, competing among themselves, as the foreign tire producers will increase their presence in China.
Google News