China Market Growth Three Times Global Average
An estimate given by Sumitomo Rubber Industries suggests that sales of tyres in China will increase at three times the global rate. Bloomberg reports company president Tetsuji Mino as saying sales will increase about ten per cent per annum from just under 150 million tyres in 2009, compared with a global growth of three per cent. “We are sure that China is the most promising market,” Mino said. “Car ownership is spreading from wealthy people to ordinary consumers.”
Last year China overtook the US as the world’s largest automotive market as sales grew by more than 40 per cent. Chinese motorists replaced about 100 million tyres last year, an amount equalling around 11 per cent of global sales, while OEM tyre sales reached up to 50 million units, Mino stated. He added that even if car sales slow, replacement tyre demand will remain strong in China. Tyre sales in Japan will probably decline gradually because of a shrinking population, while demand in the US and Europe may stay little changed, Mino said.
China is a strong contender for the location of Sumitomo Rubber’s next tyre factory, although Mino says the company is also considering India, Brazil and Russia, he said. Currently the company operates three plants outside of Japan, which produce 40 per cent of the company’s total tyre output. Mr. Mino indicates that Sumitomo aims to increase this to 50 per cent by as early as 2012, and increase the proportion of sales generated outside of Japan from 60 per cent to 65 per cent. This increasing reliance on international markets is the company’s way of adjusting to a declining and aging population in Japan, the company president explained. This year the company intends to sell 86.3 million tyres worldwide, and increase sales by six per cent annually through to 2012, he added.