China's Tire Enterprises "Get Together" to Build a Plant in the United States
Recently, foreign media disclosed that Triangle Tire Co., Ltd. is planning to build a new factory in the United States.
TireWorld.com called Delta tires. The other party stated that the globalized layout is the company's established strategy, but there is no substantive progress in the United States to build a factory. If there is any update, it will be announced to the public at the first time.
It is reported that since last year, a number of Chinese tire companies have announced that they have built factories in the United States, and some have already taken actions.
Enterprises "Get together" to the United States
Not long ago, Guangzhou Wanli Group Co., Ltd. signed an investment agreement with the South Carolina Department of Commerce.
According to the agreement, Wanli Group plans to invest US$1 billion in eight years to build a radial tire factory in Orangeburg County, the state.
The first phase of the plant's planned annual production capacity is 6 million passenger car tires.
Prior to this, Qingdao Sen Unicorn Tire Co., Ltd. selected the United States factory address as LaGrange, Georgia.
The total investment of this project is about 530 million U.S. dollars, and construction is expected to start in the second half of 2017 and put into operation within 1-2 years.
Sen Milin’s US plant has planned production capacity of 12 million high-performance semi-steel radial tires each year. The products are mainly sold to the North American market.
Recently, the overseas layout strategy of Linglong Tire has become increasingly clear. They are choosing the European factory area. It is said that it will be a matter of time before it builds a plant in the United States.
In addition, the focus of production has been on China's Jia Tong Tire, its US plant completed and put into operation this year.
Huayi Group, the parent company of Double Money Tire, also stated that it wants to set up overseas factories in the United States.
Going abroad to build a factory is facing challenges
In recent years, it has become a common phenomenon that Chinese tire companies have gone out of the country as investors. Basically, companies with strength have this intention.
According to analysis, Chinese tire manufacturers have rushed to invest in the United States, which is related to the United States' investigation of Chinese tires.
In 2015, the United States imposed high tariffs on passenger cars and light truck tires imported from China, causing the number of Chinese-related tire products exported to the United States to suffer.
Some industry insiders believe that tire manufacturers do not want to lose the United States this large market, hoping to build a factory to achieve local production, to avoid the "double anti-" high tariffs.
However, for Chinese companies lacking experience in transnational operations, “going out†to build factories also faces great challenges.
"China Tire Corp. needs to have enough corporate strength to build a factory in the United States, not only capital, but also more modern enterprise management capabilities and adaptability to local culture and laws," said a company executive.
Calculate a cost account
Tire World Net found that evading trade frictions is only one aspect, and manufacturing cost is the accounting for tire companies investing overseas.
According to a research report, at present, the cost of manufacturing in the United States has a comparative advantage. China's manufacturing costs are not only higher than in Southeast Asia, South Asia, and Eastern Europe, but also reach more than 90% of the United States.
Not long ago, the building of Fuyao Glass in the United States made a lot of noises. One of the focuses of debates among all walks of life is the lower cost of manufacturing in the United States and China.
"Glass King" Cao Dewang's comparison, whether accurate or not, reflects from the side that Chinese manufacturing and American manufacturing are already comparable in cost.
"On the basis of comparable costs, the coveted US market has become a decisive bargaining chip. This is very attractive to Chinese tire companies," said a senior executive of a domestic tire company.
In addition, the U.S. policy advantages are also emerging.
In recent years, with the promotion of the government, the United States has seen a clear reversal of manufacturing.
According to a report from consulting firm Accenture, 61% of U.S. manufacturing managers said they are considering moving China's production capacity back to the United States.
This figure is higher at rubber and plastic products companies, at 67%.
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