Foreign-invested Chinese factories are expanding their production capacity

In 2025, China's semi-steel tire production capacity is still expanding; not only Chinese tire companies need to expand, but also foreign tire companies.

01 Giti Tire Hualin Factory Capacity Doubled

On April 22, 2025, the environmental impact assessment of the expansion project of Giti Tire Hualin Factory was first publicized.

It is reported that the expansion capacity announced for the project is 4.6 million semi-steel radial tires per year and 1.1 million full-steel radial tires per year, which is a renovation and expansion within the existing factory area. It is expected that after the expansion project reaches full production, the total radial tire production capacity of Giti Hualin Factory can reach 7 million sets, including 5.6 million semi-steel tires and 1.4 million full-steel tires. In addition, the Hualin Tire Factory currently has an annual production capacity of 2.48 million bias tires.

In recent years, foreign tire companies have been committed to expanding their production capacity in China. The 278 million passenger cars in China make it impossible for foreign companies to easily give up the opportunity to dig gold in the Chinese market. Starting from 2023, foreign-funded tire companies have continuously increased their investment in passenger car tires in China, and the investment amount has roughly exceeded RMB 5.5 billion.

02 Foreign-funded tire companies collectively expand production

The first investment in Kunshan in 2023 came from Goodyear, with a total investment of US$200 million (approximately RMB 1.3 billion) and a planned production capacity of 2.6 million new passenger car tires.

The total investment of the fourth phase of Continental's factory in Anhui is 1 billion euros (approximately RMB 7.867 billion), and the planned production capacity is to achieve an annual production capacity of 18 million passenger car tires and light truck tires by 2027. Michelin's Shenyang plant has added 3.5 million passenger car tires with an investment of RMB 100 million. Bridgestone expects to invest RMB 562 million in the next three years to further promote ENLITEN® technology to more tire product lines and expand the production capacity of high-end passenger car tires.

On December 16, 2024, Yokohama Qiantang Smart Factory started construction with a total investment of US$500 million (about RMB 3.6 billion). The factory is expected to be put into production in 2026, with an initial annual production capacity of 9 million tires and a final annual production capacity of 14 million tires. It will focus on expanding the production share of tires supporting new energy vehicles and large-size high-value-added products.

Earlier this month, Kumho Tire Nanjing Factory also announced an environmental impact assessment document for tire projects. Judging from the content of the announcement, the focus of this expansion is the production capacity of new energy tires. It is expected that after the transformation is completed, 1.4 million new energy high-performance tires can be added each year. Of course, not all foreign-funded tire companies expect to expand their production capacity in China. As competition in the Chinese tire market continues to escalate, foreign-funded tire companies are also taking production cuts in Chinese factories for market share, demand, and cost considerations.

03 Capacity restructuring is the key

It was also from 2023 that foreign-funded tire companies began to adjust the production capacity of truck tires, such as closing factories, such as converting truck tire production capacity into passenger car tire production capacity. A year later, this capacity adjustment also spread to the passenger car tire field.

In 2024, Sumitomo Rubber adjusted part of the production capacity of its Changsha plant on the grounds of environmental protection. It is reported that in addition to adjusting some radial tires to silent high-performance radial tire production, Sumitomo Rubber's Changsha plant capacity adjustment also plans to reduce the plant's planned annual production capacity of 21 million to 8.4 million.

For foreign-funded tire companies, China's passenger car ownership and the brand power achieved by foreign-funded Sakaki for decades have indeed helped them to have a considerable share in China's high-end passenger car tire market. However, with the change in the consumption concept of Chinese car owners, Chinese tire factories are constantly working hard to increase production capacity and products in the field of passenger car tires. It is really hard to say whether the future market trend will be the same as expected.

At present, foreign-funded tire companies that have made achievements in supporting can still have some confidence in their hearts through the strategy of "supporting to drive retail", but for some foreign-funded tire companies with a smaller market share in China's supporting market, conservative production capacity may be the way to survive at present.