Aeolus is changing its overseas sales model

Aeolus’ revenue in 2023 will be 5.74 billion yuan (approximately £620 million; €730 million), an increase of 15.05 per cent from the previous year. Among the market shares, domestic market revenue accounted for 52.23 per cent, and replacement and OE accounted for 28.58 per cent and 23.65 per cent, respectively. According to the tyre manufacturer, it will launch a new 12R22.5 TBR product portfolio in the domestic market in 2023.

Exports account for 47.77 per cent of Aeolus’ revenue. In countries such as Vietnam and Bangladesh, Aeolus TBR products no longer rely on exclusive agents but instead contact downstream small wholesalers and retailers. Aeolus calls this model “direct sales to retailers and mining service providers to improve market control capabilities” and “us[ing] short chains and channel diversification to increase the company’s sales opportunities.”

If we look at the gross profit margin, the export market data exceeds 30 per cent, while the Chinese domestic market is less than 10 per cent. There is obviously a huge gap between the two.

Aeolus’ production capacity will remain basically unchanged in 2023, with an existing capacity of 6 million TBR (capacity utilisation rate of 70.5%), 300,000 sets of radial OTR (capacity utilisation rate of 90%), and 5500,000 sets of bias-ply engineering tyres (capacity utilisation rate of 38.2%). What has changed is the OTR tyre data. Aeolus said that in 2023, it “improved the efficiency of the existing radial engineering tyre production line and increased the radial engineering tyre production capacity”.

In addition, Aeolus has also expanded its production capacity of radial OTR products and giant tyres, trying to increase its output by 80,000 units per year. It is worth noting that Aeolus’ giant tyre product, 50/80R57 AG01, was rolled off the production line in 2023.