Shandong Linglong Aims for 20% Export Increase in 2010
Last year Shandong Linglong reportedly exported 12.969 million tyres and earned an export delivery income of RMB 4.139 billion (£403.6 million), an amount said to be more than that earned by any other Chinese manufacturer. At the Reifen 2010 show in Germany, Shandong Linglong Tire Co., Ltd. CEO Wang Feng told Tyres & Accessories that the company’s aim for 2010 is to further improve on this already impressive result.
“Compared with last year, we are planning a 20 per cent increase in exports, averaged across all our markets,” states Mr. Wang. “Different markets will of course have a different percentage increase. We aim to achieve this increase with all of our brands, our own brand as well as private brands.” The CEO adds that during this year and the next few years Linglong plans to increase passenger car tyre production, with a view to higher sales in Europe and the US.
There is a specific reason for an emphasis upon these two markets, Mr. Wang clarifies. “Mostly we will focus on the US and Europe as these two markets have a focus upon high quality tyres, unlike some other markets where the focus is just upon how cheap a product is. Our factories are now paying more attention to research and development. We have hired many engineers to improve our quality.” Mr. Wang adds that Shandong Linglong is “doing very well” in the European market, and during the Reifen 2010 show the company launched two new sizes for the European market: 225/40R18 and 205/55R16. Run-flat products are scheduled for release in the second half of this year.
The US is still a target market for Shandong Linglong despite the introduction of tariffs on Chinese consumer tyres there. When asked how the tariffs have affected the tyre maker’s business, Mr. Wang answers that the people most punished by the tariffs are US motorists: “The tyre industry is a skilled industry and needs a lot of labour. Establishing a tyre factory takes time, and therefore in the short-term US buyers cannot find a suitable source to replace brands now facing tariffs. Also, manufacturers based in the US do not have enough capacity. We still sell a lot of products in the US, the main difference now is that the US consumer pays a lot more for his product. The consumer pays the bill, pays for the 35 per cent.” The Shandong Linglong CEO adds that production costs for the major brands in the US are so high that they are not competitive even with the tariffs in place.
“Linglong is growing day by day and is paying more attention to research and development, and we have greatly improved quality,” concludes Mr. Wang. “Our aim is to supply overseas markets, especially Europe, and our products comply with all EU regulations. We want to give the customer a very good quality and safe tyre.” In parting, the CEO confirmed that Shandong Province has been chosen as the site for the tyre maker’s new proving ground and work on this project will begin during the second half of this year.