2025: Passenger car tires are also unsalable?

In the first quarter of 2025, Chinese tire companies did not seem to have a good start. Not only are truck tire sales declining, but car tire sales are not very good either. Some tire companies' car tire sales have fallen by nearly 3%.

Car tires with declining production and sales

Some tire companies reported that the sales of semi-steel tires in the first quarter of 2025 fell by 1.6% compared with the same period in 2024. Although it was not as exaggerated as the double-digit sales decline of truck tires, after two years of skyrocketing car tire sales, the situation suddenly took a sharp turn for the worse, and tire companies began to become worried.

In the first quarter of 2025, the sales of semi-steel tires of some tire companies fell by nearly 2%. This is still the sales situation of the head tire companies. In fact, the sales of semi-steel tires of small and medium-sized tire companies may face a worse situation.

From the perspective of the operating rate, from January to March 2025, the average operating rate of China's semi-steel tires was 70%. Although it was basically the same as the same period in 2024, in 2025, the same output squeezed the dealers' warehouses. In the first quarter of 2025, the average inventory turnover days of semi-steel tires was 42 days, 9.5 days more than in 2024 and 3 days more than in 2023. What's more frightening is that since the first week of March, semi-steel tires have been harder to sell than full-steel tires.

Judging from the export data, the decline in sales is most likely due to price increases. In February 2025, the unit price of tire exports rose by 12.83% month-on-month. In the domestic market, under the price increase led by foreign capital, domestic leading tire companies have also announced price increase notices, with the highest price increase even reaching 10%. With the reduced digestion capacity of retail terminals, orders sent to factories have naturally dropped sharply. Of course, in addition to the above reasons, the increase in new car sales has also affected the sales performance of semi-steel tires to a certain extent.

Supporting sales increase, squeeze replacement sales

Data released by the China Association of Automobile Manufacturers on April 11 showed that in the first quarter of 2025, China's automobile production and sales showed double-digit growth; among them, automobile production reached 7.561 million units, and sales reached 7.47 million units, up 14.5% and 11.2% year-on-year respectively.

Michelin, which has firmly taken the top spot in the Chinese supporting market, stated in its first quarter report that in the first quarter of 2024, its Chinese supporting business grew by 10% due to China's new car consumption subsidies and the recovery of China's new car demand. But similarly, Michelin also experienced a 1% decline in sales in the Chinese replacement market in the first quarter.

Chinese tire companies are still unable to compete with foreign head brands in sales in the supporting market, so the product sales competition with foreign tire companies is more in the replacement market. Although Michelin is currently mainly entrenched in the large-size market, since Chinese tire companies are also trying to gain ground in the market through a "price war", Michelin's sales decline can also be used as a reference for the current status of the large-size tire replacement market.

However, actual sales in the 17-inch and below market are more difficult. Starting from 2023, Chinese tire companies began to increase the expansion of passenger car tire projects one by one as the production capacity of truck tires was saturated and the demand for replacement of passenger car tires increased. This also led to an increase of nearly 100 million passenger car tires in China in just two years. More tires entering the market means that the brand share that was previously active in the passenger car tire market began to be squeezed out. In particular, one of the means for some Chinese brands to enter the market is to engage in price wars, and the original market share of some tire companies is facing the challenge of "continuous compression".

Of course, the challenge is not limited to the domestic market. In April 2025, as the US tariffs on China gradually escalated to 245%, the export sales of Chinese tire companies were also affected to a small extent...