When China brings down tire prices
With the rise of Chinese tires, the order of the existing tire market has been broken. In recent years, consumers can clearly feel that in the field of passenger cars, Chinese tires are like riding on a rocket, and they have developed rapidly in terms of production capacity, market share, brand awareness and other aspects.
01 PCR expelling foreign capital is happening
The development of Chinese tires in recent years is obvious to all. People with a bit of pattern in tires realize that Chinese tires are trying to catch up. And after the huge changes in the industry, the level of Chinese tires has been close to that of foreign tire giants.
In 2023, Nokian Tires announced its withdrawal from the Chinese market. Although it is difficult to comment, whether Nokian's withdrawal marks the beginning of the "collapse" of foreign tire companies in the Chinese passenger car tire market.
However, from the continuous shrinking of foreign brands in market share in recent years, they have to compete with Chinese tires on price, retreat to the high-end tire market and other actions. It can be seen that foreign tires are no longer high above and have launched a dimensionality reduction attack on Chinese tires.
02 The last position of foreign capital, large size, is about to be broken
Almost all foreign tire companies are emphasizing their future layout in the large-size high-performance tire market. It has been proved that they can't handle small-size tires. The reason is that Chinese tire brands have already lowered the price of tires. Foreign tire companies can only move to the high-end if they want to keep their profits.
The rapid growth of Chinese tire companies has forced foreign tire companies to adjust their strategies and focus on the high-end tire market. It cannot be said that foreign tire brands will definitely sit back and relax.
Because under the pressure of the booming development of Chinese brands, the survival of foreign brands has been squeezed into the large-size island of 18 inches and above.
03 Break the rules, prices will inevitably collapse
When Chinese tire companies began to break the defense line built by foreign capital, the first impact was the price system.
Without the benchmark price, there was only internal volume. For example, the vacancy in the market below 16 inches corresponds to the market where some Chinese tire companies have made breakthroughs.
And because there are no foreign tire companies for price comparison, the tire prices on the market will be more rolled, the tire prices will be lower and lower, and the profits will also decrease. Without foreign tires as a comparison object, the competition of Chinese tires in the ordinary tire market will be more intense.
04 Prices have come down, but the tire industry may not move forward
When Chinese tire companies have risen, prices have been brought down, and foreign brands have been driven away, will everyone be happy? On the contrary, the final selling price of tires determines the profits of tire people and whether tire people can continue to push tires forward.
Once upon a time, Chinese tires also claimed to have risen, but without technology, management, and marketing, they would only be short-lived. Although today's tire companies recognize this problem, they cannot make money if they sell tires cheaply. How can they engage in research and development, marketing, and production?
You get what you pay for. If tire companies cannot make money, then their products and services must be reduced. When these advantages are gone, will the market and consumers still support you? Just like the bubble burst, only ashes will be wiped out.
05 Prices have come down, and internal volume has risen
For consumers, there are actually two words for products and brands: reliable. It is no problem for tire companies to spend more effort on brands and products to achieve market influence similar to that of foreign brands. However, the biggest problem facing tire companies is not how to please the market, but how to deal with the internal competition of competitors.
As we all know, the current tire market is extremely chaotic, and tire people are extremely involuted. From price to service, almost everything is as low as possible.
All tire people will forget the quality and safety of tires. Poor quality and noise are not a problem. How to save costs and lower prices, even at the cost of quality and safety. As long as the price is lower than others, it's fine.
06 Prices have come down, and innovation has disappeared
In fact, as a tire person, competition is everywhere, and the internal competition in the tire industry has not been a day or two. However, internal competition brings a serious problem, that is, the loss of profits. Without profits, tire companies can't do anything.
Let's not talk about the small factories at the end of the crane, even the big factories at the head can't develop steadily by relying only on cost-effective products. Only high-end and expensive tire products can support the brand premium, and they are the products that really make tire companies make a lot of money.
Therefore, Chinese tire companies are only trying to expand by lowering tire prices at this stage. Tire companies are relying on relatively affordable tires to gain market share and lay the foundation for higher-end brands and products.
The major reshuffle in the tire industry is proof that the market rejects cheap and low-quality products. Today's tire companies have long realized that the low-end market is only involution and death. Only by being competitive and changing lanes to overtake can we move forward in the fierce competition.
