EU Tyre Label Law Impacts Jiangsu Tire Exports

Jiangsu tire companies only got out of the plight of the US tire special security case, but also by the EU tire labeling law. According to Kunshan Inspection and Quarantine Bureau, Kunshan exported 1,464 batches of tires in the first quarter of 2013, with a total amount of 11,213 million US dollars, a year-on-year decrease of 1.9%, a decrease of 22.8%, and a heavy export volume. As an important base for Jiangsu's tire production, Kunshan exports accounted for a total of 1/3 of the total, directly lowering the export growth of tires in Jiangsu.

“Fortunately, we have factories in Europe and North America, and European factories have started mass production last year. In the future, orders for export to the European Union will also be more directly produced in neighboring factories, thereby reducing a series of costs.” Cooper (Kunshan) Tire Co., Ltd. Relevant person in charge of the company said. Although it responded positively, it showed on the inspection report that the company exported US$30.22 million in the first quarter, which was a year-on-year decrease of 29.5%, of which exports to the European Union reached US$670,000, a year-on-year decrease of 73.8%.

The European Union's tire labeling regulations will be enforced on November 1, 2012. The regulations stipulate that the objects of the tire tires, light truck tires, truck tires, and bus tires manufactured from July 1, 2012 will be used. Affected by this, the amount of tires exported to EU by the Jiangsu region in 2012 was 38.743 million US dollars, down 19.5% year-on-year. After experiencing a 30% increase in the export volume of tires to the EU in Jiangsu for three consecutive years, the rate of decline in 2012 has dropped sharply.

According to industry analysts, the EU Tire Labeling Act is a label problem on the surface, and its essence involves tire safety, environmental protection, energy consumption, and other indicators. It also raises the production technology, inspection standards, and testing methods for export tires in China. The requirements, especially in the detection of equipment and facilities. The promulgation and implementation of the European Union's tire labeling regulations will directly increase the testing cost of imported tires in Europe and indirectly increase the production costs of tires, prompting consumers to purchase more high-end tires.

Judging from the statistical data, the amount of tire exports from Jiangsu declined slightly in 2012. Further analysis found that in addition to the EU countries, exports of tires in Jiangsu continued to grow in 2012. Tire enterprises have responded to the US tire special protection case by increasing R&D investment, adjusting the structure of export products, adjusting the export price of tires, sharing the high tariffs on special security cases with U.S. dealers, and adjusting the origin of exported tires. How to deal with the impact of EU tire labeling?

Industry sources said that from the perspective of policies, environment, raw material prices and other factors, it is beneficial to the tires as a capital and labor-intensive industry. The policy of replacing old cars with old ones in China has directly driven the tire industry's upgrading efficiency. The central bank’s interest rate cut policy also gradually improved the investment environment of the tire industry. In the international environment, the United States tire special security case ended on schedule, natural rubber prices fell sharply. The above reasons make the tire industry's profitability gradually pick up. However, the technical level of China's tire industry is not high, and product development capabilities are weak. Tires are mostly low-tech, low-grade, low-value-added products and lack market competitiveness. This problem, in the case of faster economic growth and better market demand, the contradiction between supply and demand will often be obscured; once the economic growth rate falls and market demand is low, the contradiction between supply and demand will gradually emerge. Again, from the perspective of the industry chain, the tire industry's bargaining power for the upstream and downstream is not strong, squeezed by the upstream raw materials and downstream vehicle manufacturers, only to enter the high-end tire market, the company's net profit margin can be improved, and product development and quality brand It is an indispensable core competence. With the further intensification of the European debt crisis, trade protectionism has spread. In recent years, the European Union has successively introduced a number of technical trade barrier measures, including motor vehicle safety regulations, REACH regulations, and tire labeling regulations, which has greatly increased the cost and difficulty of China's tire exports. Improving the added value of products is an important issue for tire companies.

The reporter visited Zhengxin Rubber (China) Co., Ltd., which was once an export-oriented tire production and sales company. The export sales accounted for 70% once, but now it is completely reversed, with the domestic sales ratio exceeding 80%. According to Zeng Yaode, head of Zhengxin Rubber, currently Zhengxin has established cooperative relations with Mercedes-Benz, Shanghai GM, SAIC, Dongfeng Nissan, and Toyota. Last year, it achieved sales of 5.2 billion yuan, of which domestic sales exceeded 4 billion yuan. With a total investment of over one billion yuan, the Zhengxin Rubber Mages Tire Testing Site has been completed and put into use at the end of 2012, and will promote product quality to meet world-class standards.

The Jiangsu region is currently an important base for tire production in China, with the tire export volume ranking second in the country. The world-renowned tire companies Bridgestone, Sumitomo, Cooper, Toyo, Kumho, Hankook, Zhengxin, Jianda, Nangang, Huafeng and others invested and built factories in Jiangsu. Domestically funded tire companies have double money, Xugong, and red beans. In 2012, Jiangsu exported tires to the United States, the European Union, Mexico, South Korea, Japan, Australia, Canada, Brazil, Russia, India, the Middle East, Africa and other 178 countries and regions, of which the United States and Europe are the major export markets, the United States accounted for exports. The amount of 22.5%, the EU accounted for 21.9% of exports.

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