September 8, two "heavy bombs" landed simultaneously: Brent crude approached $100/barrel intraday, natural rubber main contract closed up 2.75%, quoted at 19,635 Yuan/ton, both hitting new phase highs. Under the surge of raw materials' "dual engines", two tire companies announced price hike letters on the same day. The third round of price hikes in the tire industry this year is now unstoppable.

Rubber Approaches 20,000 Yuan, Rubber Series "Three Brothers" Surge Together

September 8 closing, Shanghai Futures Exchange natural rubber main contract quoted at 19,635 Yuan/ton, up 2.75%, intraday high touched around 19,700 Yuan, one step away from the 20,000 Yuan threshold, single day turnover reached 77.22 billion Yuan.

The day before (September 7), the rubber series had already staged a collective surge: Natural rubber main contract closed at 19,180 Yuan/ton, up 2.18%; No. 20 Rubber main contract set a new record since listing, closed at 16,345 Yuan/ton; Synthetic rubber intraday approached 8%, closed at 15,605 Yuan/ton, up 4.59% for the day. Three varieties surged collectively and broke through the high-level oscillation zone within a day, which is rare in the past two years.

Guotai Junan Futures Analysts Point to Three Drivers:

First, synthetic rubber fundamentals are relatively strong. High oil prices pushed up the core raw material butadiene price, synthetic rubber processing profits continued to decline, some private enterprises operated at reduced capacity, supply side shrank, and market anxiety over spot liquidity intensified.

Second, natural rubber raw material side is firm. Hat Yai main producing areas had excessive rainfall and tapping was hindered, Hat Yai rubber glue prices rose from 75 Baht at the start of the month to 77.7 Baht; El Niño production cut expectations continued to ferment, impact intensity expected to peak in September-November, production cut logic difficult to disprove in the short term.

Third, the price hike atmosphere in the industrial chain is formed. Around September 1, over 25 tire enterprises such as Triangle, Double Star, Aeolus centrally adjusted prices by 2%-3%, strengthening bullish sentiment.

Different from the price hike wave in March-April, this time natural rubber and synthetic rubber resonated synchronously. According to Zhuochuang Information data, comparing September 3 with August 3, Shandong STR20# Blended Rubber rose 8.75%, Styrene Butadiene Rubber 1502 rose 16.67%, Polybutadiene Rubber rose 20.65%, Carbon Black N330 rose 16.89% — the four major core raw materials all surged heavily, none were "gentle".

Oil Price Nears $100, Goldman Sachs Forecasts $120

September 8, Brent crude intraday high touched $99.42/barrel, one step away from the $100 threshold, year-to-date gain nearly 100%; NY crude futures rose over 3%. On the same day, A-share oil and gas sector surged, Huajin Shares, Heshun Petroleum, Zhongman Petroleum hit limit up, Tongyuan Petroleum, Guanghui Energy and other stocks rose over 5%.

The direct trigger is the rapid escalation of the Middle East situation: Saudi energy facilities attacked by Houthis, partial facility operations interrupted, causing 73 injuries; meanwhile, US-Iran standoff over the Strait of Hormuz continued, US military required 94 commercial ships to alter course in blockade actions.

Goldman Sachs warned that if attacks escalate further, oil price may rise to $120/barrel; China Merchants Futures pointed out that if Yanbu Port exports continue to be hindered, supply reduction could expand to 3-4 million barrels/day. Plus OPEC+ announced October production halt — this is the first since production increase started in April this year, oil price upside risk is significant.

Price Hike Letters Land Again, Another "3% Hike"

Under cost pressure, two tire companies announced price hikes simultaneously on September 8:

Fangxing Rubber announced that due to continued rise in raw material prices such as rubber, carbon black, steel cord, starting from September 12, semi-steel, full-steel, and engineering tire series prices were adjusted upward by 3%;

Shandong Weihai Rubber announced that "Hongying", "OPALS", "HIMALAYA" brand full-steel radial tires increased by 3% starting from September 12.

This is the third centralized price hike in the tire industry since late August this year. But the gap between cost and selling price remains glaring: Zhuochuang Information calculates that on September 3, production cost of a single full-steel tire was about 984.97 Yuan, up 9.21% in one month, up 13.87% year-on-year. Cost rose nearly 10 points, selling price only rose 2-3 points, some economic tires already showed real losses like "losing 80 Yuan per tire sold". Some enterprises said frankly: Tire prices need to rise at least another 16% to cover costs, and 20% increase is needed to achieve profitability.

Industry insiders point out that raw materials are unlikely to fall in the short term, but weak demand constrains transmission, price hikes will show a pattern of "multiple batches, small amplitude" rotation, industry reshuffling accelerates. For dealers, the dense period of price hike letters is both opportunity and trap, reasonable stocking, cash flow is king, maintain flexibility to navigate the cycle.

Recently, the 2026 Latin America Tire & Auto Parts Expo (Latin Tyre & Auto Parts Expo) grandly opened at the Panama Convention Center. Qingdao Sentinel Tire Co., Ltd. brought its three major brands, Sentinel, Landmark, and Deline, to Booth 2917, deeply connecting with the Latin American market with a full product matrix and global capacity advantages, taking a solid step into Latin America.

Full product lineup showcased, attracting attention from day one

At this exhibition, Sentinel showcased multiple core products such as passenger tires and off-road tires. The tread design and performance configuration are precisely adapted to the complex road conditions and travel needs of the Latin American region. With exquisite craftsmanship and outstanding product design, on the first day of the exhibition, the Sentinel booth attracted many local purchasers and industry clients to stop and observe, understanding product details up close.

Business team efficient coordination, multiple cooperation intentions reached on-site

There was a bustling exchange atmosphere at the exhibition. The Sentinel business team conducted in-depth negotiations with merchants from multiple Latin American countries on core issues such as product parameters, customized solutions, and supply cycles with professional technical explanations and efficient coordination services. Many customers expressed high recognition for Sentinel's product quality and brand strength, reaching multiple cooperation intentions on-site, laying a good foundation for subsequent cooperation between the two parties.

Three major production bases as support, delivery capabilities win customer confidence

For Latin American customers, supply chain stability and response speed are crucial, and this is exactly Sentinel's source of confidence. Relying on the global capacity layout of "China-Thailand-Morocco" three major production bases, Sentinel possesses stable and efficient global delivery capabilities, fully responding to the bulk procurement and localized supply needs of the Latin American market. The prominent global capacity signage at the exhibition also gave visiting merchants more confidence in its supply chain guarantee capabilities.

Representative of going global takes another step, Latin American market prospects promising

As a representative enterprise of Chinese tire brands going global, Sentinel has always taken technological innovation as its core, steadily promoting its global strategy. Panama is located at the confluence of North and South America, serving as a natural hub radiating the entire Latin American market. This exhibition is regarded as an important step for Sentinel to layout Latin America.

Industry insiders point out that the Latin American tire market is huge and continues to grow, with Chinese brands accelerating penetration with solid quality and efficient supply. In the future, Sentinel will continue to focus on overseas user needs, create more value for global travel with high-quality tire products and services, and deeply cultivate the Latin American market.

In the first half of 2026, the domestic tire industry showed a very obvious stark contrast.

From the latest semi-annual report, it is clearly visible: Leading enterprises that built factories overseas in advance saw their performance rise to new records year after year; small and medium manufacturers that stubbornly stuck to domestic capacity for export were basically passively under pressure and losing market share.

Those Who Go Global Early Enjoy the Dividends

The 2026 semi-annual report data plainly exposed the industry gap: Whether an enterprise can make money and stabilize its overseas market depends on whether its overseas capacity layout is fast and large enough.

Sailun Tyre is a solid benchmark for industry globalization, presenting its best ever half-year performance: Semi-annual revenue broke through 20 billion yuan for the first time, up 13.88% year-on-year; net profit was 2.16 billion yuan, up 17.97% year-on-year. More than 60% of the company's assets are laid out overseas (62.88%), the Vietnam and Cambodia bases continue to produce and earn steadily, forming the core profit backbone. Relying on the linkage of multiple bases in Southeast Asia, the Americas, and Africa, Sailun perfectly avoided trade barriers in Europe and the US, European orders are perpetually in high demand. Even with multiple price adjustments, customer demand remains firm. Over the next three years, there will be a concentrated release of overseas capacity, with strong confidence in growth.

Zhongce Rubber's overseas capacity expansion dividends have also been fully realized. In the first half of 2026, semi-steel tire production at the Thailand base increased by 38% year-on-year, while full-steel tire production at the Indonesia base surged by 249%. After the EU anti-dumping measures took effect, exports for many domestic enterprises were blocked, but Zhongce, relying on normal supply from its overseas bases, not only steadily held the European market but also took over a large volume of spillover orders. Meanwhile, relying on Indonesia capacity to take US orders, it successfully dodged tariff shocks. Currently, the company's new Vietnam base with a 1.04 billion yuan investment is progressing steadily, and the global capacity map is still expanding.

General Shares is a typical representative of benefiting from this round of going global, with performance taking a dramatic turnaround. In the first half of the year, net profit surged 114.84% year-on-year, gross profit margin increased by 3.31 percentage points, and profit quality improved significantly. The company's Thailand and Cambodia dual bases had booming production and sales. Seizing the EU trade policy window, semi-steel tire orders were perpetually in high demand. Overseas non-US market revenue rose steadily, successfully opening up a brand new growth space.

In addition, Zhengdao Tyres stated recently that the Cambodia base went into smooth production, tens of millions level of scaled capacity landed, completely reconstructing its overseas supply chain, and firmly standing in the international market under high barrier pressure.

Comprehensive Encirclement, Traditional Export No Longer Works

The eye-catching performance of leading enterprises is, simply put, the result of early risk avoidance and early planning. Nowadays, trade restrictions in the tire industry are no longer just about single tariffs, but comprehensive suppression including tariffs, dual anti-dumping, origin verification, and green compliance, which completely locks down domestic export paths.

The United States not only maintains high tariffs on Chinese tires but also ferociously investigates the origin in Southeast Asia, completely plugging loopholes for tax avoidance via transshipment; The EU is implementing semi-steel tire anti-dumping and pushing for anti-subsidy investigations, while stacking the EUDR zero-deforestation new regulations, raising entry barriers from tax, environmental, and compliance aspects.

Not only Europe and the US, Brazil, the Eurasian Economic Union, and many other economies are also increasing trade protection, with trade friction sweeping the globe.

On August 31, Canada officially joined the game, launching anti-dumping investigations on Chinese truck and bus tires. At this point, the three major mainstream markets of the US, EU, and Canada have comprehensively encircled, continuously squeezing the space for domestic tire exports, directly ramping up the urgency for enterprises to go global.

Why Must We Go Global Immediately?

Combining the latest financial reports and the global trade situation, there is no longer a need to hesitate about going global. It is necessary to go global as soon as possible and land capacity as soon as possible. This is the only way out for the industry to break through.

First, avoid trade barriers and protect core overseas markets. Now all major global markets are tightening policies. Without local overseas capacity, it is equivalent to directly losing export qualifications. Only by building factories overseas and local production can enterprises avoid anti-dumping tariffs, origin verification, and green compliance restrictions, safeguarding global sales channels.

Second, seize the huge market dividends left vacant by the industry. A large number of small and medium tire enterprises are being forced to exit overseas markets due to export restrictions, causing a significant global supply contraction. Meanwhile, leaders with overseas capacity like Sailun and Zhongce, taking advantage of industry supply gaps, continue to take over spillover orders and increase market share. The barriers instead become expansion opportunities for leaders.

Third, reduce costs and increase efficiency, improving profit advantages. Southeast Asian bases can purchase natural rubber locally, greatly compressing raw material and logistics costs; meanwhile, Vietnam and Thailand belong to CPTPP member countries, bringing tariff advantages. Exporting to Europe, the US, and Southeast Asia offers maximum cost-performance ratio, with profit space much higher than domestic exports.

Finally, widen the industry competition gap. The current industry reshuffle has already reached a fever pitch: Enterprises with overseas capacity continue to make money and expand share; those without overseas capacity can only stick to the domestic market and continue to shrink. In the future competition of the tire industry, the race is no longer about price, but about global capacity layout and supply chain risk resistance.

Overseas Capacity Has Become the Industry's Ultimate Moat

2026 is the decisive year for the globalization of China's tire industry.

Under the global trade pattern of encirclement by multiple countries, the old model of "Domestic Production, Global Export" has officially concluded, and localized production with regional supply has become the only path to break through.

The semi-annual report data has solidly proven: Enterprises that laid out globally in advance are continuously enjoying policy dividends, market dividends, and cost dividends.

In the next phase, industry concentration will continue to rise. Leading enterprises with a perfect global capacity network will continue to reap global market share. The era of globalization for China's tire industry has already fully arrived.

On August 13, the US White House released the report "The Great Transshipment Scam (Large-Scale Transshipment Scam)", placing Thailand on the Level 2 Risk Nation list, compounded by Thailand's continued ramp-up of tire market enforcement.

The gray path previously prevalent among some domestic tire traders and small-to-medium enterprises to evade US tariffs via "Thailand Transshipment Origin Laundering" has officially been declared invalid, sounding a compliance alarm for the entire tire export industry.

Thailand-origin gray transshipment has been officially classified

For a long time, suppressed by the high US dual anti-dumping tariffs on Chinese tires, domestic direct tire exports to the US have been costly. Some market players chose two completely different export routes: leading enterprises invested heavily in physical factories in Thailand, completing the full tire manufacturing process of rubber mixing, calendering, and vulcanization, obtaining a legal "Made in Thailand" status.

While another group of traders and small enterprises shipped finished domestic tires to Thailand, only changing packaging, tampering with sidewall labels, simple warehousing and assembly, and forging certificates of origin, exporting to the US under the name of Thai products to circumvent high tariffs, becoming a public gray operation in the industry.

US AI Full-Chain Strict Inspection

The American report this time directly classified such false transshipment as a systemic abuse of international trade rules. After Thailand was listed as a Level 2 Risk nation, US Customs upgraded inspection of tires exported from Thailand to the US from random sampling to normalized in-depth traceability verification.

The newly launched Detective Border AI inspection system is no longer limited to auditing paper customs declaration documents. It can cross-reference freight trajectories, corporate equity, and cargo characteristics, locking in high-risk containers before cargo arrives at the port.

More critically, the scope of accountability has expanded. Source factories, traders, overseas warehousing and processing parties, freight forwarders, and all subjects in the supply chain must bear compliance responsibilities, no longer just penalizing declaration enterprises.

Thailand Strict Crackdown on Tire Origin Fraud

Not only is there US pressure, local Thai regulations are also tightening simultaneously.

On August 20, a special investigation team from the Thai Ministry of Industry raided tire warehouses in Nonthaburi Province, seizing 408 defective tires. The case value was nearly 2.5 million Baht. Many tires lacked certification labels, and labels were manually tampered with. The involved brands have not yet been disclosed publicly.

Thai officials clarified that they will strictly check tire sources from both import and manufacturing ends. Violating entities face fines up to 500,000 Baht, 6 months imprisonment per Sina Finance.

At the institutional level, the Trade Department of the Thai Ministry of Commerce (DFT) completed the upgrade of rules of origin. All certificates of origin have been migrated to the e‑Service digital platform for online processing, divided into two major categories: General Certificate of Origin, Preferential Certificate of Origin.

To obtain genuine and valid "Made in Thailand" qualifications, tire products must meet one of five major conditions: Completely originated, substantive change in tariff classification, Regional Value Content (RVC) meets standards, meets tire category specific standards, adapts to differentiated requirements of the export destination country. Simply changing cardboard boxes or pasting labels cannot meet substantive processing standards, and legal origin status cannot be obtained. Enterprises using false certificates will face risks of cargo seizure and heavy fines.

Export Capacity Structure Accelerates Differentiation

The tightening of dual regulation by the US and Thailand will have a disruptive impact on the domestic tire export landscape. The industry formally welcomes compliance-driven reshuffling, with the differentiation between good and bad further exacerbating. This is mainly reflected in three dimensions:

First, the gray transshipment model has reached its end. Traders relying on warehousing and origin laundering arbitrage find their survival space sealed shut. For subsequent exports to the US, paper documents can no longer guarantee customs clearance. AI penetrative checks will trace the entire supply chain source of goods. Relying on luck makes it highly likely to face serious consequences such as cargo seizure, repayment of huge tariffs, and companies being placed on the US blacklist.

Second, distinguish "true factory construction" from "fake processing", further highlighting the value of overseas physical production capacity. Chinese tire factories that truly complete the full tire production process in Thailand, meeting hard standards for origin such as local value addition and tariff classification change, are not impacted by this rectification. Meanwhile, pseudo-overseas projects that only build warehouses without core production processes, merely relabeling and repackaging, will continue to face dual inspection pressure from both the US and Thailand.

Third, industry compliance costs rise, increasing pressure on small and medium foreign trade tire enterprises. Enterprises need to fully retain material procurement, production process, and cost accounting ledgers to respond to customs traceability verification at any time. Certificates of origin must be applied for through the Thai official system, eliminating third-party false certificates. In the future, tire exports will not just compete on price, but on supply chain compliance capabilities.

Core Points for Enterprise Compliance Export

CheYuanCheChe reminds, facing the new situation of current industry regulation, combining the latest rules of the US and Thai parties, tire foreign trade enterprises need to comprehensively adjust their export models, strictly adhere to compliance bottom lines. Core practical points are as follows:

1. Completely abandon the arbitrage thinking of origin laundering. The US AI inspection system can penetrate logistics, equity, and capital flow to identify false transshipment. The risk has been transmitted to the entire chain;  

2. For Thai tires exported to the US, corresponding HS codes need to be verified, clarifying the applicable Tariff Change (CTC) or Regional Value Content (RVC) standards, fully retaining complete production, procurement, and cost archives;

 3. All certificates of origin must be applied for through the Thai DFT official e‑Service platform. Reject non-formal false certificates of origin circulating on the market;  

4. Even if local Thai origin rules are met, they must also adapt to the strict verification standards the US imposes on Level 2 Risk Nations. Be prepared to face on-site verification in advance.

The journey of Chinese tyre expansion has evolved from single-point breakthroughs to full-scale booms.

Since Sailing Group invested in Vietnam in 2012, building the first overseas factory for Chinese tyres, officially opening the overseas curtain, it has now formed a scaled, globalized industrial landscape.

A recent set of major revenue data disclosed by the China Rubber Industry Association directly confirms this decade-spanning overseas wave: 14 key tyre enterprises achieved a total overseas base revenue of 79.913 billion yuan in 2026, compared to 54.082 billion yuan the previous year, a year-on-year surge of 47.76%; the average proportion of overseas base revenue accounting for the total enterprise revenue reached 40.24%.

2025-2026 Annual Overseas Tyre Base Revenue Situation

Nearly 40% of revenue comes from overseas local factories. Core industry growth of nearly 80 billion has firmly secured the overseas capacity as the main engine of performance for the Chinese tyre industry, becoming the core pillar for companies to hedge against domestic involution and resist global trade risks.

Top players widen the gap, distinct tier differentiation

From the industry revenue rankings, the leading enterprises that went overseas first, leveraging their first-mover advantage to complete global layouts, have significantly widened the gap with SME brands, making industry tier differentiation increasingly clear.

Sailing Group leads far with 28.226 billion yuan overseas revenue, a year-on-year increase of up to 104.54%, overseas base revenue accounts for 77.54% of total enterprise revenue, fully releasing the dividends of globalized capacity layout, becoming a benchmark for industry overseas expansion.

Linglong Tires and Zhongce Rubber ranked second and third respectively with 11.93 billion yuan and 10.380 billion yuan. Jiangsu General and Sentinel follow closely, with both overseas revenues breaking 6.3 billion yuan, revenue proportions both exceeding 73%, deeply binding to overseas bases, and globalized layouts continuing to deepen.

Besides the old brand top enterprises steadying themselves, the industry's second tier has full explosive power. Changfeng Tires' overseas revenue skyrocketed 126.87% year-on-year; Haohua Tires and Fumas Tires achieved a breakthrough in overseas revenue from 0 to 1. A new batch of enterprises followed the industry's overseas wave, completed overseas capacity landing, formally joined the global battlefield, making the Chinese tyre overseas matrix increasingly strong.

Behind the Revenue Surge: Blooming Globally

Nowadays, the overseas revenue scale of nearly 80 billion is certainly not the work of one day.

Currently, 26 tyre enterprises in China are setting up overseas factories, and once completed, the number of overseas bases will exceed 40, production bases are distributed across Southeast Asia, North Africa, Central and Eastern Europe, Latin America, and other global core markets, completely bidding farewell to the past single export trade model.

Southeast Asia remains the core hotbed for factory construction: Thailand gathers giants like Zhongce, Linglong, Sentinel, General, etc.; Vietnam relies on early industrial foundations to become the core profit town for enterprises like Sailun, Guizhou Tyre, etc.; Cambodia has become a new investment lowland for the industry, with 10 enterprises clustered landing.

At the same time, countries such as Mexico, Egypt, Morocco, Serbia, Russia, etc., have all landed Chinese tyre factories, and the globalized capacity map is fully unfolded.

The overseas logic has completely iterated: Upgrading from the past 'production in China, sales globally' product output to a 'capacity + market' dual-output globalized layout, building factories on-site, producing on-site, supplying nearby, becoming the industry's main business model, and also the core confidence for continuous overseas revenue explosion.

Overseas Bases: Bolstering the Profit Bottom Line

Nowadays, overseas factories have completely reversed their role, transforming from initial cost investment items into the ballast stone that bolsters enterprise profits.

Flipping through the 2025 listed company financial reports, among 11 sample tyre companies, only 2 achieved positive net profit year-on-year growth, domestic market involution intensifies, profits continue to bear pressure, most enterprises' local business increases revenue but not profit.

The core breakthrough for growth against the trend all comes from overseas capacity: 7 enterprises' overseas factories contributed over 25% to the parent company's net profit, and the value of profitability is increasingly highlighted.

Among them, Sailun's two major Vietnam bases contributed 67% of the group's profit with 43% revenue proportion; Guizhou Tyre Vietnam base leveraged 56% profit with only 21% revenue proportion, overseas capacity's profit-making efficiency far exceeds domestic production lines.

Asset proportion data also confirms this deep transformation: General Shares and Sailun Tires overseas asset proportions reached 68.44% and 63.46% respectively, Sentinel and Linglong follow closely, industry average overseas asset proportion exceeds 20%.

After more than a decade of development, overseas bases have completely completed the transformation from 'cost centers' to 'value creation centers', becoming the confidence to cross industry cycles.

After 80 Billion: Overseas Dividend Peaks

But behind the eye-catching performance, the era of the industry's barbaric growth has already ended, and hidden risks and challenges continue to be highlighted.

A large number of enterprises cluster and expand production in core areas like Southeast Asia, homogeneous capacity is released centrally, overseas base early tariffs, cost excess returns are gradually falling back, Blue ocean markets are gradually turning red, industry involution spreads from domestic to overseas.

At the same time, production base transfer cannot permanently avoid trade barriers, the former tax haven, now also faces increasingly strict trade investigations, overseas risks continue to climb.

In addition, the overseas heavy-asset factory construction model poses extremely high requirements for enterprise capital strength, geo-risk control, supply chain management, and localization operation capabilities, the drawbacks of blind expansion and extensive layout gradually emerge, and industry reshuffling accelerates.

Second Half: From Grabbing Land to High-Quality Overseas Expansion

80 billion overseas revenue marks that Chinese tyre overseas expansion has entered the second half. With overseas thresholds constantly increasing, Matthew effect intensifies, top advantages continue to expand, SME brands face increasing pressure, the industry will bid farewell to the land-grabbing model of barbaric expansion, shifting to refined high-quality operations.

Breaking out of low-price capacity involution, industry competition will upgrade to a comprehensive strength contest of channels and brands.

The only way out for the future industry breakthrough is to break free from scale involution, from extensive capacity overseas expansion to high-value brand overseas expansion leapfrog breakout, completely bidding farewell to volume stacking, achieving true high-quality value growth.

On August 20, the Thai Ministry of Industry's special investigation team raided a tire warehouse in Nonthaburi Province, seizing 408 substandard tires with a case value of nearly 2.5 million Baht.

Among them, 314 tires lacked standard certification labels, and 94 had tampered label information. Although Thai authorities have seized all involved tires, they have not released the specific brands involved, leaving the brand a mystery. Thai authorities clearly stated that the next step will be to strictly investigate the sources of tires from both import and manufacturing angles, with violators of illegal sales facing a maximum fine of 500,000 Baht and up to 6 months in prison.

This raid was not an isolated incident, but a continuation of Thailand's continuous rectification of problematic tires in recent years. In 2025, Thai police seized about 74,500 tires suspected of illegal processing in Rayong Province. Some products had grinding marks on the sidewalls, and brand names and production dates were artificially removed. Related cases implicated some Chinese tire brands, causing negative impact locally. In April of the same year, foreign media disclosed that a Chinese-funded tire manufacturer was suspected of smuggling defective tires into Thailand. After illegal modification and relabeling, they were sold as new tires, even with "Made in Thailand" labels intended for export to third countries. The Thai Ministry of Industry attached great importance to this and expressed concern that such behavior could damage the global reputation of "Made in Thailand".

On the manufacturing end, the Thai factory of Chinese-funded enterprise Pullman Hsin (01809.HK) also went through a "Compliance Controversy". In August 2025, the Industrial Estate Authority of Thailand (IEAT) was reported by media to order the "permanent closure" of the factory, accusing it of systematic violations such as illegal production without TIS certification, tearing off tire production dates, and illegal disposal of over 65 tons of hazardous industrial waste. However, Pullman Hsin stated in its announcement that it only received a "temporary production stop notice", attributing the issue to violations in carbon black packaging bag disposal and pending acceptance of emissions from expanded production lines. After rectification and a 28-day "observation period", the factory announced a temporary production stop again on September 5. The severe accusations in the official report contrasted sharply with the light-handed tone of the corporate announcement, making the truth of the event murky.

The regulatory storm in Thailand targeting the tire industry reflects the complex compliance environment faced by Chinese enterprises going global. In this industry reshuffle, the camp of Chinese-funded enterprises presents "starkly contrasting situations". Enterprises involved, represented by Pullman Hsin, are facing a major test of survival, with production resumption schedules and brand reputations facing uncertainty; while enterprises such as Zhongce Rubber, Linglong Tire, and Sentinel that strictly comply with local regulations continue to surge ahead in the Thai and global markets.

Industry insiders pointed out that with stricter global ESG standards, the tolerance of host countries for environmental protection, quality, and certification has dropped to freezing point. The "cost advantage" and "policy benefits" that Chinese tire enterprises once relied on are being replaced by high "compliance costs". Transforming from "unbridled expansion" to "compliant operation" and internalizing compliance into corporate genes has become a threshold that must be crossed in the process of globalization of Chinese manufacturing.

July 6, Wanli Tires, under Guangzhou Industrial Control Group, signed a formal agreement in Kuala Lumpur with Malaysia Berjaya Group Berjaya Corp, landing a $320 million intelligent joint venture factory, marking a comprehensive upgrade of the brand's ASEAN layout.

This is not a single case. In the past year, Wanli, Primewell Chengshan, Qingdao Fullunion, Zhaoqing Junhong, New Continent Rubber and other domestic tire enterprises have densely invested in Malaysia.

Heavyweight Signing Lands! Wanli Partners with Malaysian Giant to Open New Export Chapter

The signing ceremony for Wanli Tires this time is of very high caliber. Senior executives from government and enterprises of China and Malaysia, diplomatic envoys, and industry leaders witnessed it together. It is a benchmark event for China-Malaysia tire industry cooperation this year.

According to the cooperation agreement, both sides will build a high-performance green rubber tire production base in Selangor State. The project covers 67.9 acres, with a planned annual production of 1.2 million all-steel radial tires and 5 million semi-steel radial tires.

As a core export hub in Wanli's global production network, the project is positioned as a leading global smart green factory. It will not only perfect the brand's overseas capacity layout but also create over 1,000 high-quality jobs for Malaysia. Through professional skills training, it will assist in local talent cultivation and manufacturing industry upgrade, achieving two-way symbiosis and win-win.

Wang Fuzhu of Guangzhou Industrial Control Group frankly stated that this signing achieves a leap for the group's ASEAN layout from "single-point breakthrough" to "multi-hub linkage."

Team Gathering Layout! Multiple Giants Land, Malaysian Tire Industry Matrix Takes Shape

Wanli's heavy landing is just a microcosm of Chinese-funded tires entering Malaysia. In just a short year, top listed enterprises and powerful private enterprises have continuously landed large projects, completely rewriting the Southeast Asian tire industry landscape.

01

Qingdao Fullunion: Completed Malaysia's Largest Chinese-Funded Tire Base

This June, Qingdao Fullunion Jinma Rubber Phase II Intelligent Factory officially went into production. With a total investment of approximately 818 million RMB, the overall annual tire production exceeds 7 million units, making it the largest Chinese-funded tire production base in Malaysia in terms of scale and capacity volume.

02

Primewell Chengshan: 2.76 Billion Heavy Investment Layout

In November 2024, Primewell Chengshan invested $380 million (approximately 2.76 billion RMB) to land in Kedah Rubber City, Malaysia. The project covers over 96 acres, focusing on high-end intelligent green tire production. After Phase I reaches full capacity, it can produce 6.6 million tires of various types annually. It is expected to trial production in the second half of 2026, and fully release capacity in 2027-2028.

03

Investment Continues to Increase, Export Team Expands Fully

Private tire enterprises are also accelerating entry: Zhaoqing Junhong invests 2 billion yuan to land in Malaysia tire project, with a planned annual production of 6.5 million tires; Shandong New Continent Rubber invests 630 million yuan to land radial tire production project, continuously perfecting overseas capacity layout.

Core Logic of Gathering in Malaysia: Tariff + Location Dual Dividends

Domestic tire enterprises collectively investing heavily in Malaysia is not blindly following the trend, but a precise layout aligning with global trade shifts, with very prominent core advantages.

Tariff dividend is the primary driver. In 2025, the United States and five Southeast Asian countries reached a differentiated tariff agreement. Malaysia's tires exported to the US tariff reduced to 19%, greatly avoiding high trade barriers of direct exports from China, effectively lowering export costs. Even if the local strengthens rules of origin verification, it still cannot stop the enthusiasm of enterprises building local factories.

At the same time, Malaysia possesses core location advantages within ASEAN. Port shipping is mature, and land transport is accessible, covering both ASEAN local markets and Europe, America, Middle East and other global core markets. It is an excellent strategic pivot for building a resilient global supply chain. In addition, the local rubber industry foundation is deep, industrial workers are sufficient. Overlapping with continuously optimized foreign investment business environment, industrial cluster effects continue to highlight, further consolidating investment value.

Obvious Shortcomings! Investment Promotion Policy Competitiveness Lags Behind Thailand and Vietnam

Although layout heat is high, Malaysia's foreign investment incentive policy has obvious shortcomings, constraining industry acceptance strength. Regarding taxation, the local PS Pioneer Plan only offers ordinary projects 5 years 70% income tax exemption, high-tech can get full exemption. While Vietnam offers up to 4 years full exemption, 5-9 years half, Thailand offers up to 15 years full exemption at most. The policy is simpler and stronger.

Regarding tariff exemption, compliant enterprises in Thailand and Vietnam can directly exempt import tariffs on production equipment and raw materials. Malaysia's preferences are limited to a few special industries and projects, with narrow coverage scope and high threshold. Overall policy tends to be conservative and cumbersome. If optimization is completed subsequently, Malaysia is expected to accept a larger scale tire industry transfer.

From early gathering in Thailand and Cambodia to now collectively layout in Malaysia, Chinese tire export paths are becoming more mature. Starting from Wanli Tires heavy signing, the era of Chinese tire Malaysia layout officially arrives.

In recent years, fierce competition in the domestic tire market has intensified, international trade barriers occur frequently, going overseas is no longer an optional track but an essential task for enterprises to survive and grow.

As of the first half of 2026, 26 domestic tire enterprises have expanded overseas, with 43 independent factories. From clustering in Southeast Asia to seizing the North American, European, and African markets, the global battle of top enterprises has fully unfolded.

CheYuanCheZhe uses the latest core data to break down the ranking of China tire overseas production capacity strength, investment status, and future trends!

Overseas Production Capacity Power Ranking! 4 Tiers Gap is Huge

26 enterprises, 43 overseas factories, seemingly blooming everywhere, but tier differentiation is extremely severe! We divide into four strength tiers based on the actual number of landed factories:

First Tier: Global Top Players

Sailun Group | 5 overseas factories, firmly ranking first in the industry. Undoubtedly the "No. 1 Overseas Enterprise", the only Chinese tire enterprise spanning Asia, Africa, and the Americas, layout logic is textbook level:

▪️ Southeast Asia (Vietnam, Cambodia): Core production bases, ensuring production capacity supply

▪️ Mexico: Positioning in the North American market, avoiding US tariff barriers

▪️ Indonesia: Close to natural rubber origin, compressing raw material costs

▪️ Egypt: Radiating African and European markets, connecting overseas growth

 Sailun does not rely on blind expansion, but on precise global positioning, building a complete overseas supply chain barrier.

Zhongce Rubber | 4 factories, the domestic tire leader layout is steady. Thailand and Indonesia factories are already profitable, Vietnam project progressing steadily, new Mexico construction project added, fully covering Southeast Asia, North American core markets, single factory capacity scale is top in industry.

Second Tier: Top Power Players

Sentury, Linglong Tire | Sentury focuses on European high-end market, Morocco construction, Spain planning implemented, forward-looking maxed out; Linglong Tire refines low-efficiency overseas projects, keeps Thailand, Serbia quality bases, capacity quality maxed out, focusing on high-end manufacturing export.

Pulin Chengshan, GCT, Guizhou Tire, Double Star Group, Wanli Tire, Lanma Tire, Huasheng Rubber. This batch of enterprises is the main force for going overseas, not blindly expanding, focusing on single-point deep cultivation:

▪️ Guizhou Tire, Sentury in same track, layout Morocco to position Europe

▪️ Huasheng Rubber adjusts strategy, Vietnam project changed to proposed, focusing on South Asia Pakistan market

▪️ Lanma, Wanli deep cultivate overseas regional segments, steadily doing localization penetration

Third Tier: Overseas Tasting Water

Haohua Tire, Fumas, Yongsheng Rubber, SunSet, etc. 15 enterprises, all single overseas factory layout. Most are in production start-up, construction start, planning stages, belonging to initial overseas market tasting, are core potential forces for subsequent overseas expansion. Among them SunSet Brazil factory has started construction, planned for production start, landing pace continues to accelerate.

Overseas Logic Changes! From "Forced Tax Avoidance" to "Active Global Positioning"

Earlier domestic tire enterprises going overseas, purpose was simple: Evade Europe and America "Anti-dumping and Anti-subsidy", high tariffs, rely on Southeast Asia factories to change origin, protect overseas orders.

But now, overseas logic completely reversed, 3 major changes visible to naked eye:

Full Overseas: No longer only Zhongce, Sailun top players, Haohua, Huasheng, Yongsheng and other small and medium manufacturers joining in

Full-domain Layout: Say goodbye to single Thailand factory building, Mexico, Egypt, Morocco, Brazil, Spain bloom everywhere

Deep Cultivation Landing: From simple OEM factories, upgraded to globalization bases integrating production, logistics, local operations

Main Battlefield for Overseas: Why is it Southeast Asia?

Currently over 60% domestic tire overseas factories cluster in Southeast Asia (Thailand, Vietnam, Cambodia, Malaysia, Indonesia), 3 core advantages irreplaceable:

Tariff Dividend: Southeast Asia export Europe America tariffs far lower than China, directly avoiding trade sanctions, protecting profits

Raw Material Advantage: Global natural rubber core production area, building factories nearby greatly reduces raw material, logistics costs

Cost Lowland: Land, labor costs lower than domestic, adapting to tire manufacturing rigid needs

But shortcomings also prominent: Far from Europe America core consumer markets, local supply chain support imperfect, only suitable as primary manufacturing bases.

Second Wave of Overseas: Farewell to Southeast Asia, Global Multi-point Positioning

Top enterprises have long jumped out of Southeast Asia competition, starting global precise layout, emerging tracks rise:

Mexico | North American Portal Relying on USMCA, zero tariff/low tariff entry into US market, logistics distance short, response fast, is core springboard for seizing North American high-end markets.

North Africa (Morocco/Egypt) | Europe Africa Hub Adjacent to Europe, tariff preferences, labor costs low, becoming domestic tire entry into EU market optimal transit station.

Brazil | South American Core Positioning South America largest consumer market, avoiding regional trade barriers, radiating whole South American regional incremental.

Industry Truth! Don't be deceived by "Number of Overseas Factories"

Many people mistakenly think: More factories, stronger strength? Big mistake! 3 industry hidden truths, understand real landscape:

Start ≠ Production, Production ≠ Profit Foundation, start is just beginning, an overseas factory from construction, reaching capacity to profit, at least needs 5-7 years, many projects still in investment period, not yet monetized.

Radial Tires > Passenger Car Tires, Quality Difference Huge Ordinary passenger car tires threshold low, production fast; Radial truck tires technical barriers high, value added high. Sailun, Zhongce, Linglong top enterprises, achieved double tire full coverage, strength far exceeds ordinary manufacturers.

Building factories easy, operation hard. Overseas factory building is just foundation. Local labor policy, supply chain support, local channel operations, are core keys to deciding whether enterprises can long-term stand.

Next 3 Years, Tire Overseas Core Trends

Combining current layout pattern, China tire globalization, will welcome 3 deterministic trends:

Industry Accelerates Differentiation, Stronger Remains Stronger Future overseas threshold continues to rise, funds, management, technology weak SMEs, will gradually fall behind. Finally form: Top globalization, Waist guarding segments, Niche enterprises deep cultivation domestic landscape.

From "Manufacturing Overseas" Upgrade "Brand Overseas" Current stage overseas mainly OEM production, subsequent core competition, will turn to brand, channel, service globalization, get rid of "Low-price OEM" label, impact international high-end markets.

Global Supply Chain Reconstruction, Welcome Lane Change Opportunity Global trade barriers intensify, regional production mainstream, domestic top tire enterprises with complete capacity layout and supply chain advantages, expected to break foreign giant monopoly, achieve overtaking on curves.

Finally Written

43 overseas factories, is China tire industry globalization best report card. From passive tax avoidance to active positioning, from single Southeast Asia layout to global deep cultivation, China tires long said goodbye to low-end involution, in global market planted feet firmly. Capacity overseas is just beginning, brand overseas, value overseas, is China tire future ultimate track!

Recently, the U.S. Trade Representative Office issued a new Section 301 tariff announcement, categorizing 60 countries and regions into different tax brackets. This tariff package is not only levied in addition to the old Section 301 tariffs, but tire products are prominently included with no room for exemption. This policy adjustment marks a reconstruction of global trade rules and also forces China's tire industry, which relies heavily on external markets, to face a fundamental shift in its export environment.

Export Paths Blocked: Direct Export and Southeast Asia Transit Double-Pronged Restrictions

China's tire direct export and transshipment trade space is facing severe squeezing. On July 15, the U.S. Department of Commerce concluded the sunset review of Chinese passenger car and light truck tires, pushing the combined tax rate to a historical high of 190%, basically blocking the direct export path to North America. Meanwhile, the EU previously announced anti-dumping duties of 24.4%-45.3% on relevant Chinese tires, weakening the price competitiveness of Chinese products in Europe.

More severe is the synergy of U.S. and EU tariff policies. In the U.S. new Section 301 tariff list, Southeast Asian countries such as Vietnam and Thailand are in the same 12.5% tax bracket as China, which echoes the EU's recent anti-circumvention investigations initiated against Southeast Asia. When Chinese enterprises attempt to avoid tariffs by transiting through Southeast Asian capacity, the U.S. and Europe have set up an "Origin Trap." Combined with anti-dumping investigations by Brazil and Peru and environmental barriers of the Eurasian Economic Union, trade barriers globally targeting Chinese tires are continuously rising.

Profit Model Under Pressure: "False Globalization" Faces Compliance Challenges

As the world's largest tire producer, 80% of domestic capacity is concentrated in low-end products, and the long-term "trading price for volume" model has become a key focus of anti-dumping investigations by various countries. Data shows that in 2025, China's tire export volume was huge, but profit accounted for only 8%. In the face of tariff barriers exceeding 100%, this meager profit space is instantly squeezed away.

Under tariff pressure, domestic tire companies have sparked a boom in overseas factory construction. In the first half of 2026, more than a dozen projects announcing overseas expansion were declared, with total investment exceeding 20 billion yuan. However, simple capacity transfer is facing compliance challenges. A certain enterprise's Southeast Asia factory faced suspension due to EU anti-circumvention investigations immediately after production start; another enterprise was still levied high tariffs due to not meeting U.S. "content of origin" standards. Compared to the full-chain localization models of foreign giants like Michelin and Bridgestone, "False Globalization" staying at the "assembly workshop" stage with supply chains still bound to China appears weak in the face of tariff barriers.

Industry Accelerates Transformation: Deep Localization Becomes Consensus for Breaking the Deadlock

When low-price advantages are limited, China's tire industry is forced to face the reconstruction of the industry's underlying logic. Linglong Tire, in its Serbia factory, explored a "R&D + Production + Supply" three-in-one deep localization model by achieving European local procurement, forming an R&D team targeting EU regulations, and entering the OEM market. At the same time, Zhongce Rubber, Double Coin Tire, etc., are doubling down on local supply chains, and Sailun Group introduced Industry 4.0 standards at its Cambodia factory.

The tightening of new Section 301 tariffs and global trade barriers objectively accelerates industry reshuffling and transformation. When Southeast Asia transit paths are blocked and low-price models are unsustainable, this industry adjustment triggered by tariffs is pushing Chinese tires to move from "Global Factory" to "Global Brand". Future market competition will gradually shift from capacity scale contests to a comprehensive battle of technological innovation, brand value, and global operational capabilities.

Recently, a photo of the spare tire at the rear of a Taiwan Army "light tactical wheeled vehicle" sparked heated discussion online. The photo shows the spare tire clearly printed with the word "SAILUN", which is a product of Sailun, a Chinese tire manufacturer headquartered in Qingdao, Shandong. According to Taiwan media reports, the Taiwan "Army Command" subsequently confirmed that these tires are indeed a mainland enterprise brand, purchased in 2020, and added that the actual delivery origin was Thailand and Vietnam, meeting acceptance standards. This unexpected "product promotion" incident not only debunked the so-called "non-red supply chain" advocated by the DPP authorities, but also unexpectedly served as a full-domain global live advertisement for Sailun Tires, sparking heated discussion among netizens on the island: "It indicates that tires made in mainland China have superior quality."

In fact, Sailun Tires' standout strength was no accident, but a microcosm of the strong rise of China's tire industry. Founded in 2002, Sailun has now developed into a tire manufacturing leader integrating new materials, new processes, and intelligent production. In terms of R&D, Sailun owns the globally unique "Liquid Gold" tire technology, not only breaking the "devil's triangle" law where tire wear resistance, anti-slip performance, and low rolling resistance cannot be balanced simultaneously, but also performing excellently in reducing energy consumption. Meanwhile, Sailun built the world's first rubber industrial internet platform "Xianglian Cloud", and independently developed the world's largest 63-inch giant engineering radial tire, highlighting its core strength in the tire intelligent manufacturing field.

In terms of global layout, Sailun has taken a route of "R&D + Distributed Tire Manufacturing". Currently, Sailun has intelligent manufacturing bases in Qingdao, Dongying, Shenyang, etc., domestically, and has invested tens of billions in advance in Vietnam, Cambodia, Indonesia, Mexico, Egypt, and other places. This global capacity layout not only effectively avoided international trade barriers, but also ensured the stability of the supply chain. This is also the underlying logic behind why the Taiwan Army's purchased Sailun tires were produced in Southeast Asia.

Market and brand recognition is the best footnote to Sailun's technical strength. In 2026, Sailun held the 10th position in global tire brand value again with a brand value of 1.239 billion US dollars, becoming the only Chinese brand in the top ten of the list, ranking first in China's tire brand value for four consecutive years. Over eight years, brand value grew 2.7 times, with growth rate leading the global top tire enterprises.

Sailun's rise relies on China's powerful tire industry full-chain cluster ecosystem. At the raw material end, China possesses the world's largest natural rubber distribution center, significantly compressing enterprise logistics costs; at the equipment end, domestic rubber intelligent equipment leading companies' internal mixing, shaping, vulcanization equipment global market share exceeds 40%, firmly grasping the autonomy of tire manufacturing equipment; at the research and development end, relying on top industry think tanks and national-level technology enterprise incubators, it has gathered 60% of tire manufacturing experts in the industry and a R&D team of over 4,000 people, providing a core engine for China's tire intelligent transformation.

The blunder incident of the Taiwan Army vehicle equipping Sailun tires, seemingly a piece of behind-the-scenes trivia, actually reflects China's tire manufacturing global competitiveness. The more exclusion, the wider the recognition. Chinese tire enterprises represented by Sailun are accelerating to the center of the world stage with solid technology, forward-looking global layout, and full industry chain advantages.

July16th evening, XPeng MONA L03 globally launched. This model positioned as a 'Smart Fashion SUV' for young users comes originally equipped with Linglong SPORT MASTER e tires.

At this hyper-competitive juncture of the 150,000 RMB class new energy SUV market, this matching combination is worth breaking down.

Why XPeng Chose Linglong Tires

L03's core selling point is 'Intelligent Driving Equality' — dual Turing AI chips, 1500 TOPS computing power, 2nd generation VLA system, bringing high-level intelligent driving to the 150k price point. This pricing strategy determines its requirements for the supply chain: performance cannot be compromised, and costs must be controllable.

As a key component directly contacting the road surface affecting range and NVH, tires need to meet standards in three indicators simultaneously: low rolling resistance, quietness, and wet grip, while the price must be competitive.

Linglong SPORT MASTER e fits exactly in this position. This product has obtained the highest EU Tire Label AAA certification, with hard metrics supporting grip, low rolling resistance, and quietness, and as a domestic tire, it has cost advantages over foreign brands.

More importantly, Linglong's customer base in the new energy supply chain — BYD, Geely, Chery, Seres, Leapmotor, etc. — has already formed scale effects and quality control stability. When OEMs evaluate supply chain risks, they tend to choose suppliers with substantial vehicle-mounted verification.

XPeng choosing Linglong is not a tentative cooperation but an addition on top of an existing mature supply system.

Where is the differentiation of SPORT MASTER e

For the category of new energy specialized tires, everyone is making them, but few products truly meet OEM supply requirements and end-user perception simultaneously. SPORT MASTER e's differentiation is reflected in three levels.

Technically, the AAA label means it reached the highest EU grade in rolling resistance, wet grip, and noise, which is rare in domestic tires. Low rolling resistance directly affects range, wet grip concerns safety, noise affects driving experience — these three happen to be the most frequently complained-about tire-related issues by new energy vehicle owners.

Linglong achieving top levels in these three dimensions simultaneously indicates substantial technical accumulation in formulations and structural design, not relying on a single metric to dominate.

From the market validation perspective, this product was shortlisted for the UK WhatTyre '2025 Eco Tire of the Year Award' final nominations, marking the first time a Chinese tire has entered the final competition for this award.

In the domestic 'China Auto Strict Selection' evaluation, it also won the 'Top Ten Tires of the Year' and 'Annual Green Environmental Protection Award' double honors. Endorsement from third-party evaluation agencies provides reference value for OEM supply decisions and end-consumer purchases.

From the customization perspective, Linglong designed the sidewall for L03's youth positioning — oxygen-resistant suede black process, XPeng logo contrast with suede black background, aperture element integration. This customization appears to be 'face work' in the supply business, but actually reflects Linglong's response speed and willingness to cooperate with OEM needs.

For new power brands like XPeng, the unity of detail texture is part of the brand tone. Linglong willing to invest in this indicates the supply relationship between both sides is not a simple buy-sell but involves a certain depth of synergy.

Linglong's Position in the New Energy Supply Track

Linglong has ranked first globally in new energy supply tire sales for consecutive years. This 'first place' is not supported by a single client but by coverage — layout in both economy and mid-to-high-end segments.

In the list of supply car companies, there are traditional domestic brands（BYD, Geely, Chery）, also joint ventures（Dongfeng Nissan, GAC Honda）, and new forces（Seres, Leapmotor）. The diversity of the customer structure reduces the risk of single-client dependency.

Looking deeper, Linglong's overseas capacity layout is becoming the second growth curve for new energy supply business. China's new energy complete vehicle export growth is very fast, June exports increased by 152.7% year-on-year. Tires as supply components going overseas with complete vehicles is a confirmed increment.

Linglong has ready-made capacity overseas, no need to ship from domestic. Against the background of increasingly complex international trade barriers, this is a substantial competitive advantage.

Several Judgments at the Industry Level

This supply indicates many issues behind it. The first judgment is that the competition for domestic new energy supply tires is shifting from 'who can do it' to 'who can do it stably'. OEM requirements for tires are no longer 'just needs to fit', but finding a balance point between rolling resistance, quietness, wet grip, durability, and cost.

Suppliers able to meet these conditions simultaneously will gain more supply share. The share of leading enterprises like Linglong, Sailun, and Zhongce in the new energy supply field will continue to increase.

The second judgment is that customization is becoming standard for supply business. OEMs attach increasing importance to the visual unity between tires and complete vehicle design. Details like sidewall logo, tread design, and color matching are shifting from 'bonus items' to 'basic items'. Tire enterprises capable of providing customized services will hold advantages in supply bidding.

The third judgment is that overseas capacity is becoming a moat for supply business. As EU anti-dumping measures land and US trade reviews on Southeast Asian tires continue, tire enterprises with capacity overseas can not only serve Chinese complete vehicle exports but also directly meet localization supply needs of overseas OEMs. Linglong's bases in Thailand and Serbia have taken the first move in this round of competition.

Whether XPeng MONA L03 can stand firm in the 150k level market depends on product power and delivery capability. But in this supply link, Linglong has played its cards correctly. What remains to be seen is whether this set of SPORT MASTER e tires can build a reputation in end-user actual use, and whether Linglong can extend XPeng as a client from domestic supply to overseas supply.

July, the European Tire Association released a position paper targeting the EU's "Industrial Acceleration Act". The Association welcomes the EU's recognition of tire manufacturing as a "strategic, energy-intensive industry", but believes the draft has critical gaps in "market scope, demand-side incentives, investment support, and regulatory coordination".

The core message of this statement from the Association is clear: the European tire industry is using policy tools to "de-Chinese" this product.

Continued Loss of Market Share, Import Surge is the Main Cause

The data provided by the Association is quite direct. Since 2018, EU tire manufacturers have lost over 12% of their domestic market share.

Regarding passenger car tires, the EU domestic share dropped from 71% in 2018 to 59.6% in 2025; truck and bus tire share dropped from 72% to 60.8%. However, imports surged by 195%, mainly driven by China.

A number often overlooked is: replacement tires account for 75% of total tire sales in the EU, but the current "Industrial Acceleration Act" draft offers no support for the replacement market.

The Association's logic is that the Original Equipment (OE) market is bound to car manufacturers, while the replacement market is the core base for European tire companies. If policies only protect OE but not replacement, the resilience of the European automotive value chain cannot be built.

The main breakthrough point for Chinese tires in the EU is precisely the replacement market. The Association elevated the replacement market to the level of a "strategic component", aiming to pave the way for subsequent demand-side incentives.

The Association's Five Policy Demands

At the same time, the Association proposed a set of targeted demands regarding the draft's gaps, essentially adding a protective layer for European manufacturing.

The first is identity upgrading. Recognizing tires as "strategic components" in both OE and replacement markets, not just as ancillary parts for car manufacturers. This step is to let tires hitch a ride on the industrial support of the "Industrial Acceleration Act".

The second is rules of origin plus procurement priority. The Association supports current customs rules, but requires priority layering on top of this—in public procurement and public support programs, prioritize EU manufacturing, followed by customs union countries, then followed by countries meeting equivalent trade and procurement standards.

This means that even if vulcanized in Vietnam or Thailand, as long as it is not in the EU, customs union, or equivalent country, it is ranked third.

The third is support for retreaded tires. In the commercial vehicle sector, the Association calls for support for EU-manufactured retreaded truck and bus tires. Retreading reduces emissions by 52% compared to new tires, allowing it to carry a decarbonization label while protecting the truck and bus tire industry chain in Europe. Chinese truck and bus tires remain a main import source in the EU; retread support is a lever for European companies to fight the new tire price war.

The fourth is upgrading tire labels and linking them to public procurement. The Association cites Commission data stating that EU tire labels save 45 terawatt-hours of electricity annually and reduce 15 million tons of CO2 emissions. Tires account for only 2% to 3% of the value of a complete vehicle, yet affect vehicle energy efficiency by 20% to 30%. The subtext is: public procurement should prioritize buying high-performance labeled tires and European tires, using demand-side boosting to drive European manufacturing.

The fifth is decarbonization funding and permitting acceleration. The Association demands stronger fiscal support for industrial decarbonization projects, accelerate permitting procedures, and clarify governance rules for "Industrial Manufacturing Acceleration Zones". These are hard requirements for European tire plants to cope with high energy and carbon costs.

This Strategy Aligns with Anti-Dumping Measures

The EU "Industrial Acceleration Act" was originally positioned as a pan-industrial policy, and the tire industry wants to fit itself into a strategic cage, getting decarbonization funds, procurement preferences, and rules of origin protection. This strategy aligns with the EU's implemented anti-dumping and pending anti-subsidy measures on tires from China—trade relief manages "blocking", industrial policy manages "supporting".

But this European self-rescue also has hard constraints. First is cost. European energy, labor, and compliance costs are what they are; policies can boost demand and provide funds, but it is hard to level manufacturing costs to the level of China and Southeast Asia.

Second is the spillover form of Chinese capacity. The Association's "priority layering" can block some, but not all. If Chinese companies build plants in regions with EU tariff preferences such as Serbia and Morocco, the rules of origin issue becomes more complex.

Third is how much the draft will ultimately concede is still unknown. Car manufacturers within the EU may not be willing to be bound by "European priority procurement", and cost pressure will be passed back to vehicles. The Tire Association and vehicle manufacturing interests are not fully aligned.

For Chinese companies, several things need to be done in advance. Overseas origins must withstand scrutiny, and supply chains must withstand tracing. High-end performance, green indicators, and new energy vehicle support are the only viable currency to bypass discrimination. Retreading and service systems can be looked at in advance; once the European truck and bus tire retreading loop is leveraged by policy, tire body supply and retreading cooperation might be new entry points.

This statement from the European Tire Association is not the end of the trade war, it is the prologue to industrial policy wars. For Chinese tires, the EU, this largest export market, the game has upgraded from competing on price to competing on origin, green, and high-end.

In July, the Chu Energy Automotive ET test vehicle rolled off the line in Wuhan, behind which is the owner of China's second-largest 4S group — Hengxin Automotive Group, Dai Deming, holding 10 billion in self-owned funds, gripping three cards: batteries, channels, and qualifications, looking to move up from the downstream channel to manufacture complete vehicles.

This matter hasn't made much of a splash in the automotive industry yet, but in the more 'grassroots' tire industry, the strategy of 'dealers entering the product business' has actually been in play for 20-30 years.

Currently, the replacement market for tires accounts for over 70%, dealers hold a complete grassroots network ranging from county-level repair shops to roadside tire stores, more fragmented than 4S channels and closer to real demand.

But currently, the capacity utilization rate for the entire industry is less than 70%, price wars have driven prices down to the cost line, dealers entering tire manufacturing, are they copying Chu Energy's playbook, or jumping into another fire pit?

Several Real Examples of 'Dealers Making Tires' in the Tire Industry

Let's list a few representative examples first. Qin Long, Chairman of Qingdao SenQilin, founded Sendatai in 1999. Earlier, he was an agent for Huanghai, Shuangqian, and Linglong, later also represented Michelin and Continental. Started fresh in 2007 to make SenQilin, targeting high-end passenger car tires, built a factory in Thailand, positioned in Spain. Now is an A-share listed company, revenue exceeded 4 billion in the first half of 2024, one of the representatives of domestic high-end tires.

Father and son Zhao Jianbin and Zhao Ruilong originally worked with Qingdao Ruilong Tire Technology, mainly engaging in tire import and export, owned brands 'Maibote' and 'Jingnai' under them. In 2019, Zhucheng Guopeng Rubber went bankrupt, they purchased the entire assets for 117 million, renamed Yousheng Tires to enter manufacturing; in 2024, invested another 5.16 billion to launch a new Shandong Youyue Rubber project.

Shenyang Ruihua Group Jin Penghui started in the 1990s, doing motor oil, batteries, tires, was a core agent for Toyo Tires in China, absolute channel advantage in the three northeastern provinces. In August 2025, Liaoning Hengdasheng (controlled by Ruihua) acquired with 91.59 million USD 86% equity of Tongyio Zhangjiagang, a subsidiary of Japan Toyo, renamed 'Hengdasheng Toyo Tires' — dealing for thirty years, turned around and swallowed the original manufacturer.

In 2024, Qingdao Sunset Tire Co., Ltd. planned to build a new factory in Brazil. When the news broke, the industry was shocked, this unknown dealer not only changed industries to build a factory, but also went straight overseas, likely to become the first domestic company to build a factory in Brazil.

Of course, there have been many failed attempts in recent years. In 2017, a provincial Michelin agent in East China launched a private label, commissioned a small factory in Shandong, focusing on e-commerce and partner repair shops, resulting in 2019, because the factory substituted materials, a batch of tires showed bulging and falling pieces, compensated over 2 million, the brand went bust immediately.

A large dealer in Nanjing started a private label in 2018, for 3 years, sold only 100,000 tires a year, not even as much as a big brand agent sold in a quarter, finally gave up...

Advantages of Dealers Making Tires

First is ready channels, dominating the replacement end. Over 70% of tire sales are in the replacement market, dealers already deal with hundreds of thousands of repair shops and tire stores nationwide, even sinking to county and township outlets, distributing their own brand is almost zero cost, no need to throw money at investment promotion and promotion like new brands.

Even 4S cannot match this point — 4S shops only cover new cars and warranties, tire dealers' terminals are more scattered and closer to replacement scenarios, promoting their own tires just requires giving repair shops a few percent rebate, and can expand quickly.

Second is understanding terminal pain points, products stay on track. Dealers receive feedback from repair shops every day, knowing which patterns are wear-resistant, which specs sell well in the Northeast, whether new energy vehicle owners care more about low rolling resistance or quietness, product positioning is more accurate than marketing departments of pure manufacturers.

Third is controllable capital and risk. Top dealers have stable cash flow, no need to seek financing like new forces and watch faces, first try OEM/ODM, expand if selling well, stop if not, loss is not big.

Disadvantages are equally prominent, failures far outnumber successes

First is technical and production shortcomings. Tires look simple, but formula, structure, process thresholds are not low, especially now with EV tires, silent foam, self-healing, etc., dealers lack technical accumulation, either find OEM or build factory themselves, need to hire R&D, buy equipment, high investment, long cycle, currently full industry capacity utilization is less than 70%, building a factory is like throwing money into a red ocean.

Second is conflict with agency brands. Dealers originally represent big brands like Linglong, Sailun, Michelin, starting own brand is like stealing big brands' business, big brands will definitely squeeze rebates, or even cancel agency rights, left hand fighting right hand.

Third is difficult to break brand recognition. Tires are safety parts, car owners replace tires by recognizing big brands or repair shop recommendations, own brand has no endorsement, can only take mid-to-low end cost-performance route, cannot sell at high prices, no one recognizes top end, thin profits, poor risk resistance.

Fourth is the dividend period is over. The bosses before caught the 2000-2010 window of capacity shortage and demand explosion, now capacity is overstocked, price wars driven to cost line, if you do mid-low end again, you can't make money, cannot do high end, stuck.

Now tire industry dealer profits are getting thinner and thinner, rebates for agency big brands are lower every year, some really want to integrate upwards to make their own brands, but don't blindly copy Chu Energy's 'full-chain closed loop' for car manufacturing.

The logic of tires is simpler: first OEM, avoid direct competition, use channel advantages to earn stable money, much more reliable than throwing money to build a factory and be a manufacturer. After all, even the top players in the tire industry are competing fiercely now, dealers have no technology or capacity reserves, forcing in means likely being a cannon fodder.