Domestic tire producers strengthening brand-building

Post time:10-30 2007 Source:CE.cn Author:
tags: brand tire
font-size: +-
563
All of the world top 10 tire manufacturers have entered China market in 2005, and they are putting on a "tire expansion battle". Michelin Tire Co. Ltd plans to increase the share of such tires for car and small commercial vehicle in China to 4 percent of its global sales before 2010 and to 8 percent before 2020. Bridgestone Corporation's mid-term target in China is to take up 20 percent in the market in 2008. The huge vehicle population and increasingly growing auto market is gradually releasing the potential of China's tire industry, and is also hastening tire giants to accelerate developing China market.

Domestic tire manufactures have to confront with not only a tough battle with the giants in the same field. The price of raw material rises sharply, the export rebate rate is lowered down, and technical barrier in important tire export market such as Europe and America is getting strengthened. How will domestic tire manufactures cross the threshold? For the fast growing tire industry of China, the problem is not limited to the close-to-saturation production capacity. Brand-building and industry regulation are the key points for the healthy development of tire industry of China

Tire manufacturers of China used to highly value the product operation instead of brand operation in the past. This is the important reason that makes enterprise performance not in direct ratio with brand influence. Therefore, in order to reinforce the promotion of home-made brand of meridian type tire for passenger car, and to cultivate independent brands, China Rubber Industry Association decided to recommend Chinese brands of meridian type tire for passenger car to home and overseas market this August. According to statistics of the Association, the total output and market coverage of the 6 big brands accounted for about 30 percent of the member enterprises and 25 percent of the country.

Along with the rapid growth of vehicle population of China, a huge market for tire begins to emerge as tire is one of the most important vehicle parts. Relevant data shows that in 2005, Chinese tire manufactures produced a total of 283 million tires, up by 18.5 percent than 2004. And in 2006, the tire output of China reached 433.19 million. Looking at domestic auto market, foreign tire manufactures have occupied 70 percent car accessories market, while Chinese brands account for only 30 percent. It is quite difficult for Chinese brands to enter into car accessories market. According to analysis of insiders, the independent brand has a lot to do with the current car market structure. At the moment, most car joint ventures in China have tens of years' package purchase history, and all of the tire manufactures cooperating with them are international famous manufacturers, so it is rather difficult for Chinese tire brands to penetrate into this kind of long-term cooperation. But along with the leap in output and quality, Chinese tire brands could see opportunities for development.

Facing such a big market with such a strong demand, domestic tire manufactures having had practiced in the foreign market began to make strategic transfer and market development in succession after several years' technology introduction, absorption and innovation. Before the new round of competition with international giants begins, most domestic brands' practice in overseas market is satisfactory. The export sales volume of passenger car use tire of South China Tire & Rubber Co., Ltd. surged by more than 70 percent in the first half year, and the company's export sales has maintained over 20 percent growth for 9 successive years. In 2006, the overseas sales of Linglong Brand tire manufactured by Shandong Linglong Rubber Co., Ltd also surpassed US$300 million.

Investigation shows that when buying vehicles, only 18.5 percent consumer care about the brand and performance of tire. But when replacing the tires, 88.6 percent of consumers concern the brand and performance. When selecting tires, 57.2 percent of consumers concern more about product performance, 28.7 percent mainly concern use life, while only 8.5 percent concern the price factor. This means that Chinese consumers, with certain brand recognition, prefer to trust the quality assurance of international brands when considering the gap between local brands and international brands. The different consuming idea of domestic market and overseas market also blocks the development of domestic tire brands. At first, in mature markets like Europe and America, the supervision is relative strict. All the tires that come into the market have experienced strict test and examination, and the quality can be completely assured. Moreover, in foreign countries, vehicle plays only the role of a moving tool. Due to this kind of simple positioning, foreign consumers concern more about the economics. The price advantage of Chinese tire turns to be relatively high cost performance, thus they are easy to attract consumers. As a matter of fact, experts in the circle told the reporter, the quality of Chinese rubber tire doesn't defeated by foreign enterprises. The reason for their disadvantage in domestic market lies in lack of their own brand names.

"It's time for building brands", many tire workers have noticed the point. But as the marketing and management of domestic tire manufactures is quite extensive, and they are lack of intensive cultivation experience, so there is not short cut for Chinese tire brands to improve the image. Along with more and more car racings coming to China, Chinese tire brands began to appear in the list of sponsors. But the improvement of product performance is the same urgent as strong marketing methods in order to change the idea of consumers. Excellent performance needs the support of powerful technology, which is the life line of tire manufactures.

Comment

Consultation