Demand overtaking supply: Triangle Europe’s contribution to the global picture

Triangle Tyre Europe introduced EffeX SUV and EffeX Winter tyres at The Tire Cologne, products that build on the growing portfolio of latest-generation tyres that are designed to defy expectations in the marketplace. Tyres & Accessories spoke with European general manager, Corrado Moglia, and UK sales director, Steve Eke, and learnt more about how demand is outstripping supply, indeed the international business of the European business plays a strategic role in the overall Triangle global operation, which arguably punches above its weight in the global context.

But first the new products. According to the manufacturer, the new generation of SUV tyres is “future-proof” and offers “significant improvements in braking, handling and rolling resistance”. In addition, its tread design reportedly “ensures low noise levels”. As far as sizes are concerned, the new SUV line-up ranges from 16 to 21 inches and currently totals 17 dimensions.

The EffeX Winter is also aimed at high-performance vehicles and specifically those whose owners are looking for “exceptional grip and handling in cold weather conditions, including snow and ice”. The new EffeX Winter is also being launched in 17 dimensions, covering the spectrum between 18 and 20 inches and cross-sections from 55 to 35. In addition to those two new arrivals, Triangle Tyre Europe showcased other current products at Tire Cologne, including the two all-season tyres SeasonX and SeasonX Van for vans. Continuing the global contribution

Sales of the latest-generation product portfolio – of which the new winter and SUV introductions are just the most recent additions – along with the company’s unarguably strong position in OTR tyres play a key role in Triangle’s global position.

Official figures show that in 2023, Chinese tyre manufacturer Triangle’s achieved revenue of 10.42 billion yuan (about £1.13 billion; €1.33 billion) and net profit of about 1.4 billion yuan (about £150 million; €180 million). Revenue of 10.42 billion yuan means that Triangle has surpassed Double Coin in the ranking of Chinese tyre manufacturers in 2023 and comes in behind ZC Rubber, Sailun and Linglong.

But there is one crucial difference. Compared with its competitors, Triangle has no overseas factories and overseas assets account for 0.52 per cent of total assets. That figure doesn’t refer to sales and is somewhat at odds with the enormous contribution to turnover that overseas operations such as Triangle Europe make to the global Triangle business.

At the same time, the Triangle’s global net profit performance was impressive. For comparison, Linglong’s revenue exceeds 20 billion yuan, and its net profit is close to 1.4 billion yuan. In other words, Linglong sold 10 billion yuan more products than Triangle, but its net profit was almost at the same level. Triangle stated in its annual report that “high value-added products such as engineering radial tyres and giant tyres have maintained a high level of profitability and made outstanding profit contributions”. Again, sales of high-performance and OTR tyres are established strengths of the European operation.

The one bottleneck is production. Triangle reports that it produced 24.17 million tyres in 2023, with a capacity utilisation rate of about 90 per cent. Meanwhile, the tyre company sold 25.68 million tyres. In other words, demand is demonstrably exceeding supply. Within that picture, more than 50 per cent of Triangle’s revenue comes from overseas (meaning non-Chinese) markets. Specifically, Triangle reports that sales grew particularly rapidly in Europe and the Middle East.

With a capacity utilisation rate of 90 per cent, it is not surprising that demand is overtaking supply. And with Triangle partnering with market-leading wholesaler Stapleton’s in the UK, who are said to be providing first-rate marketing and brand-building support, there is another reason why the strong performance of the European operation will continue in the future. But the question remains: how long can these impressive results continue with current levels of production?

Corrado Moglia told T&A that Triangle Europe has grown from unit sales of 370,000 consumer tyres a year to north of 4 million units annually during the last seven years. This year the company expects to sell 4.2 million tyres in Europe, including around 120,000 commercial vehicle tyres. And that growth, which equates to around a 15 per cent increase, comes in spite of sharp rises in Europe bound shipping costs.

That leaves just two options. Either one of the existing plants in China is quickly expanded, or Triangle Tyre invests in a new plant outside China. Should Triangle go down the overseas factory route, South East Asia, Latin America or even Europe are likely options. With growing numbers of Chinese tyremakers talking about plants in and around Europe, something like that would seem an obvious choice. But, such is the urgency in Triangle’s case, either of the two options (expanding production capacity domestically or building a new overseas tyre plant) would be welcomed.