The “Tyre Special Protection Case†caused a great impact on China’s tire companies. The reporter’s exclusive interview with Ruan Si Li, General Manager of Cooper Tire China, said that at present, tire companies have already crossed the export barrier and are now the most troublesome. It is the cost pressure caused by the rush of raw materials to tire companies.
Reporter: What is the position of the Chinese market in Cooper Global?
Shi Si Li: Cooper sales in China last year reached 600 million US dollars, of which the growth rate of car tires is 41%. Last year, Cooper’s capacity in China was 13 million, accounting for 20% to 25% of Cooper's worldwide.
Reporter: After the Sino-US tire special security case, what aspects of Cooper's strategic adjustment? Will it consider seeking a lower-cost country to lay out a new production base in order to shift China's production capacity?
Shi Sili: A few months ago, we opened a meeting in North America and decided to shift some tire orders from North America to other regions with little demand. At the same time, some tires were only retained in the North American market. Europe and the United Kingdom have some adjustments in their export distribution. We mainly transfer 8% to 10% of North American exports to the United Kingdom and the Middle East. However, there is no such strategy for the temporary transfer of production bases.
Reporter: In other words, do you think that China's production capacity this year does not need to be reduced too much to "winter"?
Reporter: Production may vary by 5% to 15%. The biggest problem in the tire industry is not the issue of exports. This has been digested. The most troubling problem now is the price increase of raw materials. At the peak of last year, raw materials reached a barrel of 3,200 US dollars, and then it dropped to 1,600 US dollars. Tire companies have been doubling their raw materials since November last year, and we will at least increase the cost pressure of double digits.
In the second quarter, there will be pressure for price increases. Now, tire companies have released air prices to increase prices, and the industry has also discussed and discussed price increases of 5% to 8%. If the raw materials keep the price high, the tire companies will not be in the third quarter.
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