World's Leading Tire Manufacturers Exceed $8 Billion in Investment Budget in 2010

The world's major tire manufacturers, excluding China's tire companies, have an investment budget of more than US$8 billion in 2010 and plan to add 100 million sets of tire production capacity, which is the second highest investment budget year in 25 years. The investment is mainly concentrated in China. In Asia, which is dominated by India, the ratio is nearly 50%.

Comprehensive media on September 25 news, the world's major tire manufacturers in a year after the compressed investment, set off a tire expansion boom. In the past 12 months, the world’s major tire manufacturers have invested more than US$8 billion in their 2010 annual investment plans, and plans to add 100 million sets of tire production capacity. According to the “European Rubber Journal” report, this figure was more than three times that of 2009, the second highest investment budget year in 25 years. There are dozens of expansion projects, adding 95 million sets of car tyres, 1 million sets of heavy tyres and millions of tons of agricultural and engineering tyres.

Nearly 50% of investment goes to Asia

In 2009, the tire industry was depressed by the financial crisis. Major tire manufacturers significantly reduced their investment in tires. New construction projects almost stopped, and some tire factories closed down or reduced production. According to statistics, in 2009 there were more than 10 factories closed down, and the annual production capacity was reduced by 50 million sets. The investment budget of the world's major tire manufacturers in 2009 was 45% lower than the average in 2008. The research and development costs of global tire companies are also greatly reduced. Among the 18 tire companies that provide reporting, only 4 companies have increased the ratio of their R&D expenses and sales revenue over the previous year. They are Hankook Tire Co. and Xiacian Tire Co., Ltd. respectively. , Titan International and Apollo Tire Company.

In 2010, the situation has completely changed, and a new tire investment boom has risen globally. In the past 12 months, world-renowned tire companies have almost announced the expansion or construction of new tires. According to preliminary statistics, tire companies that do not include China have a total investment of more than US$8 billion. The investment is mainly concentrated in Asia, which is dominated by China and India, with a ratio of nearly 50%.

Michelin ranks first among companies with US$1.9 billion, and there are four projects. Bridgestone ranks second with 1.35 billion U.S. dollars and has 9 projects in total. Larger investments include the next century, Pirelli, Sumitomo, the mainland, Yokohama, and Russia’s Nizhnekamskshina.

China absorbs 3 billion U.S. dollars

The location that attracts the most investment in tires is China, which is estimated to be more than US$3 billion. The world's top ten tire companies have announced the construction and expansion of tire projects in China. Michelin plans to invest US$1 billion in Shenyang to build passenger and load-bearing tire plants with a daily production capacity of 28,000 units and put into production in 2012. It will invest USD 25 million in repurchasing shares of Michelin Shanghai Warrior Tire Co., Ltd., all of which will be controlled. Bridgestone plans to increase its capital by 98 million U.S. dollars and expand its production capacity in Wuxi from 8,000 Nissan to 12,000, and it will reach production in July 2011. Pirelli plans to invest US$300 million to increase the production capacity of passenger cars in China and Romania by 60%, and to increase the production capacity of truck tires in China, Egypt and Latin America by 20%. Hankook plans to invest 82 million U.S. dollars to expand its production capacity of cars and light truck tires in Jiaxing, with an annual production capacity of 30 million sets. Toyo Tire plans to invest US$105 million to establish a car and light truck tire plant in Zhangjiagang, which will eventually generate 2 million units of annual production capacity. Continental Tire plans to invest 185 million euros in a new car and light truck tire plant in Anhui, with an initial design capacity of 4 million tires per year. Cooper plans to invest $17.9 million to increase its stake in Chengshan. Yokohama Tire Corp plans to invest 7 billion yen to increase the annual production capacity of the Hangzhou passenger car tires plant from 3 million to 5.1 million, and is expected to reach production in January 2011.

India has become an investment hot spot

The rapid growth of Indian radial tire sales has also become a hot spot for investment. Bridgestone plans to invest 539 million U.S. dollars in the construction of its second tire factory in Pune City, and plans to eventually reach 10,000 tires per day for tires and 3,000 tires for heavy loads; it will invest 36.7 million U.S. dollars in 12-18 months to expand its presence in India. Kaida Tire Factory's all-steel heavy-duty tire production capacity will be completed in the second half of 2012.

Michelin plans to invest 870 million U.S. dollars to establish a load and engineering tire plant in Tiruvallur, India, which will be completed in 2 to 3 years. JK Tire plans to invest 10 billion rupees in the establishment of a new tire factory in Sriporadu, aiming to provide the original factory with tires; investment of 325 million US dollars in the establishment of meridian passenger car and truck tire factory in Chennai, India, annual production capacity of 5.6 million sets. At the end of March this year, Apollo announced the further expansion of its new factory in Chennai when it started production. Balkrishna Industrial also plans to build a new radial tire and skewed agricultural tire factory in western India, invest 200 million U.S. dollars, and start production in 2012.

According to the statistics of the Tamil Nadu government, the total investment for the tire industry in the next three to four years will exceed Rs. 56 billion, of which Rs 44 billion will be used for construction in progress.