Linglong moves to 7+5 tyre factory investment model

The board of Shandong Linglong Tire Company Ltd has revised its 10-year “medium and long-term development plan (2020-2030)” to focus on a 7+5 rather than a 6+6 tyre manufacturing capacity expansion model. Up till April 2020, Linglong has worked according to a 5+3 plan, but last year this was upgraded to 6+6, meaning the company plans to run six tyre factories in China as well as six situated in international locations. However, according to a stock market filing dated 10 June 2021, Linglong’s board voted unanimously in favour of running a total of seven plants in China and five internationally.

The reason for the adjustment? “In the face of repeated overseas epidemics, the economic situation is unstable and uncertain” and therefore Linglong’s new plan works to “strengthen the country based on a new development pattern of mutual promotion”. At the same time, Linglong says it will work to “continue to deepen cooperation with OEMs” as well as promoting a new domestically focused retail strategy designed to “make the domestic market and the international market better by leveraging the potential of domestic demand”.

While the proposal has been approved by Linglong’s board it still needs to be submitted to the shareholders meeting for deliberation. In a connected move, Linglong’s board voted to invest in building a new factory and establishing a subsidiary in Tongchuan City, Shaanxi Province, China.