Allen Tsaur: 80% of Chinese Tyres Not Ready for Labelling
Despite tough external conditions Cooper Chengshan’s top line growth is said to be “progressing well” in 2010 and the firm’s “amazingly strong” domestic truck and bus tyre market growth in the first quarter of this year is a key highlight of this performance. Meanwhile the company’s passenger car tyres sales have reportedly continued on their “relatively consistent” recent trajectory. Looking forward, Cooper Asia general manager and Cooper Chengshan boss Allen Tsaur reports that the company is well prepared for the forthcoming 2012 tyre labelling legislation across all its brands.
From Cooper Chengshan’s perspective the new laws are a good thing that “drives us forward.” However, this is clearly not the case across the board in China, with Tsaur reporting that an estimated 80 per cent of tyre suppliers are not up to scratch when it comes to labelling legisaltion preparedness. Out of roughly 300 tyre manufacturers currently operating in China, only the top 30 are said to be of a “good quality” that is compatible with exports into the mature markets. Of these, only the top 10 (including Cooper Chengshan) are already set for the 2012 rules.
More are likely to follow these between now and the implementation of the rules in November 2012, but the remaining perhaps 80 per cent are expected to simply switch distribution to what can only be described as less legally demanding market destinations such as Africa.
Tyre manufacturer promotes Starfire export brand, reports continued growth despite downturn
To put the company’s recent growth figures into context, Tsaur explained that Chinese domestic market’s truck and bus tyre sales are usually slow during this period because of the extended holiday taken by most people to mark Chinese New Year. As has already been mentioned the truck tyre market results during the first part of 2010 were said to have been – up between 40 and 50 per cent over previous year – but Tsaur contextualises this by pointing out that in 2008 production was something like 70 per cent of a normal first quarter’s production; in 2009 it was the peak of the recession (although the company still performed well).
The company’s own branded domestic retail business could well have been responsible for some of the increase in the company’s sales. According to Tsaur, the company’s domestic retail business grew 35 per cent, while truck and bus retail grew 15 per cent. This trend is also reflected in the numbers of brand points of sale in the marketplace. During 2010 the number of passenger car tyre points of sale selling Cooper Chengshan-produced tyres increased to 800, while the number of equivalent truck tyre points of sale swelled to 2000. (It is worth pointing out that the truck tyre depot total benefits from the pre-existing Chengshan truck and bus tyre retail network).
US Roadmaster tyre sales more than doubled during 2010
Sales of the company’s Roadmaster tyre in the US – which Tsaur says characterises the “safety and quality” of the company’s products reportedly more than doubled during 2010.
The Chinese truck and bus tyre market is dominated by domestic players with brands produced by Giti Tire and Hangzhou Zhongce duking it out for control of the market. However, once again due to the fact that Cooper Chengshan has access to Chengshan’s pre-joint venture market share, this company is also in a strong position in this sector.
In order to capture more market share and to keep up with demand, Tsaur reports that Cooper Chengshan has launched and is launching “many new sizes and products.” This means over 100 specifications in the passenger car segment and between 40 and 50 in the truck and bus segment.
Like the wider tyre business, especially in the mature markets such as Europe, Cooper Chengshan is said to have experienced a slight de-segmentisation effect, however because of the scale of the operation this hasn’t really impacted the business. Due to the fact that the business only really started exporting Cooper brand products to Europe in 2008, the Cooper Chengshan has largely avoided catching a cold from the frosting over of demand in Europe during 2009 and 2010. Instead it more a question of introducing sales to these markets rather than seeing capacity affected by any kind of downturn in orders.
The Starfire export brand was front and centre on the Cooper Chengshan stand at Reifen China this year, with the company hoping to increasing sales of the product that is produced in some of the same factories of its more illustrious cousin.
According to Allen Tsaur, Starfire tyres are developed and designed by the same teams that work on the Cooper products, but these tyres are clearly aimed at a different price range. And likewise they are aimed at different type of customer and consumer. The products, the vast majority of which fall within the 13 – 16 inch size range, are squarely pitched at the “bread and butter” section of the market, leaving the high performance and ultra-high performance fitments open to the Cooper flag brand. As a result of this differentiation in market approach, the Starfire brand is positioned at a different price point – 15 per cent below the Cooper brand.