230 tire companies went bankrupt and cancelled in China!

Employees blocked the door to ask for wages… 2022 reshuffle accelerated.

At the recent teleconference on economic stabilization with an unprecedented scale of “over 100,000 people”, the relevant person in charge said that in April 2022, the liquidation of enterprises across the country soared by more than 23% year-on-year.

Behind this data is the helplessness of many business leaders. If there is a glimmer of hope, they will not take the road of bankruptcy and liquidation.

The tire industry is also an industry that has been greatly affected by the epidemic. From January to May 2022, a large number of tire owners could not hold on, and finally embarked on the road of exit or bankruptcy.

230 tire-related companies went bankrupt and cancelled

According to the data of the Qichacha platform, since 2022, a total of 230 tire companies have closed down, cancelled, bankrupt and restructured.

These enterprises cover Shandong, Jiangsu, Fujian, Henan, Anhui and other major tire manufacturing provinces, including tire factories and tire dealers. Among them, Shandong Province has the most, with 52 companies that have cancelled bankruptcy and reorganized.

The year 2022 will be a major crisis for a large number of domestic industries, combined with the combined effects of the frequent shutdowns caused by the ongoing spread of the epidemic, the turbulent international environment, lower global economic expectations, and declining consumer purchasing power.

The crisis in the tire industry will continue to ferment, and a large number of enterprises will enter the “cold winter”. In the future, more tire enterprises may face the crisis of bankruptcy or withdrawal of more tire enterprises.

Employees blocked doors for wages

The epidemic has also adversely affected the normal operations of tire companies. On March 4, someone broke the news that the Qingdao Tulechi Rubber Factory was in arrears with wages, social security, and no compensation. Dozens of employees blocked the gate of the factory begging for wages.

Tire companies are industries with relatively large leveraged financing, especially small and medium-sized tire companies. Most of the funds for building factories come from bank loans.

In normal years, it is difficult to survive, and hundreds of millions or billions of loans cannot be repaid. As the epidemic continues, more and more tire companies will experience thunderstorms in 2022.

A Shandong tire factory owner said in an interview: “The most important task of our company at this stage in 2022 is to survive.

The tire industry has now entered the darkest moment. Data from the China Rubber Association shows that from January to April, the production and sales volume and revenue and profit of 10 key tire companies have experienced negative growth.

Among them, the operating rate of all-steel tires was only 66.1%, down 8.3% year-on-year, and the operating rate of semi-steel tires was 74.5%, down 10.9%. Inventories increased by 41.4%. It can be said that a large number of tire inventories produced by tire factories are backed up in warehouses…

Some manufacturers took advantage of the May Day holiday to suspend production and maintenance to ease the current pressure on production and sales. There are relatively many companies that participated in the suspension of production during the May Day holiday.

The data shows that 102 tire factories in China are scheduled for the May Day holiday, of which 65 tire factories have production suspension arrangements, the production capacity of all-steel tires is 147.1 million, and the production capacity of semi-steel tires is 473.9 million.

From the perspective of statistical proportions, the production capacity of all-steel tires accounted for 68% of the statistical production capacity, and the production capacity of semi-steel tires accounted for 65%. More than half of the manufacturers had short-term suspension.

Tire industry reshuffle begins in 2022

The bleak market is a major reshuffle for the industry.

A large number of tire companies will be forced to leave, and the surviving companies will gain more development space and usher in better development opportunities.

The biggest problem in China’s tire industry at present is the worry of large quantity and quality. China produces more than 50% of the world’s tires, but there are few really famous tire brands.

Since 2018, hundreds of tire companies have gone bankrupt/auctioned. According to the current situation, the reshuffle of China’s tire industry will not ease, but will accelerate.

After the survival of the fittest and the integration of resources, most Chinese tire companies will gradually withdraw, making market space for companies with advantages in the Chinese tire industry, and Chinese tire giants will gradually emerge to jointly promote the development of China’s tire industry.

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