Bringing the World to China
China at the start of the 21st century can claim to hold a position on the world stage enjoyed by Britain in the 19th – the People’s Republic is the undisputed ‘workshop of the world’, and its swelling output of manufactured products has seen the country grow to become the world’s fourth largest economy. Included in this swift expansion has been tyre industry production – recent figures indicate that China now produces some 330 million tyres annually. Of this amount 235 million are radial types, and two-thirds of these are destined for export. However, China has not merely grown as a production site for meeting the needs of global markets. The Chinese are quickly becoming a nation of consumers, and their appetite for vehicles is voracious. While only six Chinese out of every hundred own a car, research conducted by AC Nielsen indicates that China contains more people who aspire to own a car, but currently do not, than any other country. The outlook for tyre sales within China is thus good, and domestic demand is tipped to surpass export figures in about five years’ time. Whether buying or selling tyres, China is a country that provides many lucrative business opportunities.
For this reason it is no surprise that there are several trade exhibitions based in China or in the region that target those with an interest in this large and interesting market. Of the half-dozen exhibitions held in China or Southeast Asia, the China International Tire Expo, or CITExpo for short, is the largest, and the annual event in Shanghai attracts a good mix of Chinese and international visitors. In 2007 CITExpo took place between September 12 and 14. As Tyres & Accessories has previously reported, this choice of dates clashed with those of Tyrexpo Asia, held in Singapore; in spite of this, the organisers of CITExpo, Reliable International Exhibition Services Co. Ltd., reported approximately as many people through the doors of the Shanghai Everbright Exhibition Center – 6850 in total – as they did the previous year when no rival tyre show was vying for the attention and patronage of industry players. The fact that CITExpo did not lose ground in terms of visitors and even increased its total number of exhibitors in the face of strong competition from elsewhere in Asia attests to both the importance of CITExpo as a venue in which to meet clients and talk business, and the significance of Shanghai, China’s trade capital, as a meeting point for local and international business.
“Shanghai is China’s international city, and if a show wants to act as a bridge between China and global markets, this is undoubtedly the place to be,” commented Wilko Fong, managing director of Reliable International Exhibition Services, when speaking with T&A during CITExpo. Mr. Fong emphasised the priority Reliable places upon cultivating CITExpo as more than just another Chinese tyre show and reported that 41.6 per cent of visitors to CITExpo 2007 – a total of 2,850 people – came from overseas. This figure is marginally higher than in 2006; last year international visitors made up 41 per cent of attendance at CITExpo; the year before only 35 per cent. But to put this number of international visitors at CITExpo into perspective, 2,850 people is only about 350 visitors less than the total number of people in attendance at this year’s Tyrexpo Asia.
The organisers’ records indicate that CITExpo received visitors from 22 European countries as well as from the Americas, Africa, the Middle East, Russia and the Asia and Pacific regions – a total of 86 countries. The proportion of visitors who pre-registered increased by 120 per cent over figures for last year, and pre-registration was particularly strong amongst international visitors, showing that attendance at CITExpo is increasingly been planned as an important business event rather than as an add-on, said Mr. Fong. His comments are given weight by feedback from exhibitors at the 2007 show, who rated the visitors this year as being of a “higher quality.” These statistics and comments alone dismiss criticisms from some quarters that CITExpo is just a show for China.
These criticisms are levelled against CITExpo primarily due to the predominant Chinese flavour of the exhibitors, and it must be admitted that those displaying their wares at this year’s CITExpo were overwhelmingly China based. Of the 254 exhibitors displaying their products in the Shanghai Everbright Convention Center, only a handful had travelled from overseas for the event – the remainder were either local firms or Chinese agents for overseas manufacturers. This is no cause for concern, comments Mr. Fong; the role of CITExpo is not to be another Essen or SEMA show. The Shanghai exhibition is carving its own niche as a place where new business relationships are formed; links between major European and American wholesalers and Chinese companies have become well established over the last decade, therefore it is natural that these companies do not require exhibition space. However many representatives from these firms were, added Mr. Fong, present at CITExpo as visitors.
A criticism of last year’s CITExpo was the relative absence of Chinese tyre majors; in 2007 this shortcoming was addressed to an extent by the attendance of the second, third and fourth largest Chinese tyre manufacturers (in terms of units produced), plus several others from the ‘top twenty’ tyremakers. Shandong Linglong, who in the number two position produced 15.65 million tyres in 2006 and realised a sales turnover of RMB 7.577 billion (£489,9 million), presented its latest range of tyres, which are sold under the Linglong, Shanling and Leao brand names. The greatest emphasis was on the company’s Linglong brand of truck tyre, which were displayed prominently, and company representatives were at pains to point out a number of new product offerings in this segment, including several lower profile tyres. A further source of evident pride for the staff of Shandong Linglong was their soon to be completed passenger car tyre factory, currently under construction at the company’s premises in Zhaoyan. The full integration of this new plant will see a further seven million units added to Shandong Linglong’s annual capacity.
Of those exhibiting in 2007, 30 per cent were first time exhibitors. Amongst exhibitors who were present in past years, 70 per cent increased their exhibition space – from 20 per cent up to an impressive 700 per cent increase in booth size – although some of the more elaborate exhibits could hardly be considered booths. All in all 15,000 square metres of exhibition space was utilised at CITExpo 2007 – this year, for the first time, two adjacent halls at the Shanghai Everbright Convention and Exhibition Center were required to house every exhibitor.
Upstairs in the larger of the two halls was the Automotive Testing Expo, organised by Surrey based UKIP Media & Events. Billed as China’s only trade show totally focused on the technologies and services involved within automotive testing and quality engineering, the joint staging of this show alongside CITExpo has, report Reliable, been a highly successful partnership. Combined, the two events covered an area of 30,000 square metres and hosted 500 exhibitors.
Two particular trends were apparent at CITExpo 2007. One was visible even last year; the strong emphasis on large OTR tyres, ranging in size up to the Qingdao Qizhou mining tyre, which stood almost four metres tall and was the first thing visitors to the exhibition’s west hall saw upon entry. This is hardly surprising given the readiness of Chinese manufacturers to fill an acknowledged gap in the market, and some believe that the abundant supply of high quality OTR tyres streaming out of factories in China will bring the global shortage to an end much sooner than expected.
The second trend, one that has taken a number of people by surprise, is the proportion of radial products on offer this year. The radialisation of China’s tyre manufacturing base has developed much more swiftly than was anticipated in some quarters. For example, Shandong Linglong’s sales revenue from radial tyres increased 34.0 per cent between 2005 and 2006, to RMB 4884 million (£315 million). The Triangle Group, also exhibiting at CITExpo, experienced a 33.3 per cent growth in sales revenue from radials during this period, to RMB 4858 million. Approximately 71 per cent of the tyres manufactured in China today are radials, and increasingly it is not just passenger radials becoming available – at the Shanghai show a number of producers and their agents, such as Shuma Tyre International, were informing visitors of advanced stage plans to enter the truck and OTR radial segments. Shuma represents Shandong Hawk International Rubber Company, who are said to be currently constructing a greenfield facility in Liazhou city with an annual capacity of 20,000 OTR radials and a million truck radials. This particular company’s plans were by no means an exception.
Also more prevalent this year, commented Wilko Fong, were manufacturers of alloy wheels and tyre maintenance products. An examination of the exhibitor list revealed 28 wheel manufacturers in attendance, and 19 suppliers of accessories, including valves, balancing weights, pressure gauges, tyre repair tools and machinery. Without exception every manufacturer and supplier of wheels and accessories boasted existing contracts international markets, and those who were not already present in Europe viewed this as the market to aim for. European companies wishing to acquire tyre industry products for import would certainly find no shortage of suitors at CITExpo.
Reliable International Exhibition Services offers Chinese-English language interpreters for US$70 per day, with other language interpreters available upon request. The use of this service, or attending with a bi-lingual associate, is definitely recommended. While virtually every exhibitor had English speaking staff at hand, a number of these people admitted to have been hired for the show, and were not long-term company employees. Thus finding somebody who spoke good English and possessed a good knowledge of the company and its products could be a hit and miss affair, and sufficiently detailed information about a company and what it had to offer was sometimes difficult to obtain.
This one criticism aside, CITExpo 2007 can be considered a success, with feedback from visitors and exhibitors predominately favourable. And exhibitor re-booking rates confirm these comments. Before CITExpo 2007 wrapped up on September 14, Wilko Fong commented that 70 per cent of space for next year’s show had already been sold. By November this figure had jumped to 95 per cent, with a number of well-known names committed to return in 2008. Reliable is planning to increase floor space by a further 20 per cent for 2008. However, if even this expanded venue is filled up ahead of schedule, temporary exhibitor accommodation within a marquee will also be offered.
When asked what he hopes to see more strongly represented in 2008, Mr. Fong commented that in 2007 he saw an embryonic focus upon retreading emerge for the first time, and hopes this will increase. This year only four exhibitors solely dedicated to retreading materials and equipment exhibited at CITExpo, however in light of the lack of maturity in China’s retreading market, even this handful of companies can be seen as a positive development. The dates for CITExpo 2008 have already been set – September 17-19, 2008 – and again the venue will be the Shanghai Everbright Convention & Exhibition Center. As this time the show’s dates do not coincide with those of any rival exhibition, it will be interesting to see the result when CITExpo is given the opportunity to realise its full potential.