Foreign Tire Producers Building Capacity In China.(Brief Article)(Industry Overview)(Statistical Data Included)

Foreign tire manufacturers are speeding up investment in China, following the rapid expansion of China's automobile market and rising demand for car tires and high-performance tires following China's entry into the World Trade Organization (WTO). In addition to its production base in Shenyang, northeast China, the French Michelin Co. set up a joint venture in Shanghai in cooperation with the Shanghai Tire Co., the largest tire producer in China, which is expected to start production in 2002.

Another French tire company has also built factories in Shenyang and Tianjin, and plans to use products made by its Tianjin factory to supply to Japanese cars. The Japanese Yokohama Rubber Co., which sells tires in China that are mostly produced in China, and with a market share of three percent, will found a joint venture company in Hangzhou, capital city of eastern China's Zhejiang Province, with the Hangzhou Rubber Group in January 2002.

Yokohama holds 45 percent of the stake in the $60 million joint. Annual production capacity is expected to reach 750,000 tires by April 2003, which will increase to 1.5 million by 2006. After completing its production base in China, Yokohama would increase its market share to more than eight percent by 2010.

Currently, China has about 200 companies, including domestic companies and joint venture, producing tires for four-wheel vehicles. The production of foreign-funded companies is expanding. According to estimates by Yokohama, the total demand for tires in China will reach 40.5 million by 2004, and up to 108 million by 2010.

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