Our reporter Zhao Xueyi
Trainee reporter He Wangjuan Feng Yuyao
Following the rise in raw material prices, high shipping prices, and poor price transmission, tire companies are facing new challenges.
In an interview with the "Securities Daily" reporter, Zhu Zhiwei, a tire analyst at Longzhong Information, said that overall, the tire industry is facing unprecedented pressure this year. First, the price of raw materials has been running at a high level this year, bringing cost-end costs to tire companies. The second is the decline in market demand, which brings pressure on the sales side. The third is that due to the impact of the epidemic, many car companies have successively announced the suspension of production and production, which has also brought a great impact on the tire industry.
The shutdown of car companies affects the tire industry
Under the repeated epidemics, the "shutdown" of the automobile industry has made its upstream tire industry "worse".
It is understood that since March, many car companies in Jilin, Shanghai and other places have announced the suspension of production, and as of now, there are still many car companies that have not resumed production.
The shutdown of car companies directly affects every link in their industrial chain.
Taking Shanghai as an example, Wang Xianbin, director of Gasgoo Automotive Research Institute, told a reporter from Securities Daily: "Shanghai's automobile production is close to 10% of the overall passenger car market, and new energy vehicle production accounts for nearly 17% of domestic production. The shutdown of some factories in the Yangtze River Delta region, including Volkswagen, Geely and Great Wall, is expected to lead to a cliff-like decline in auto production in the second quarter."
"The suspension of production by car companies not only affects them, but also their upstream parts companies are deeply implicated, including tire companies." Wang Xianbin said.
According to the reporter's interview and understanding, due to the repeated epidemic situation, in fact, in the first quarter, related parts and components companies have faced prolonged product delivery times and declining performance.
An auto parts company told reporters that the epidemic has affected the auto supply chain and the company's production, acceptance and delivery efficiency and costs.
"In the first quarter, the company's revenue and net profit both declined. In addition, the customer's vehicle production declined, which also affected the company's product delivery."
An automobile logistics company told the "Securities Daily" reporter that the outbreak of the epidemic since March has had a great impact on Changchun, Shanghai, Shenyang and other automobile industrial bases, and the epidemic prevention and control policies in many places have a greater impact on road transportation.
Zhu Zhiwei admitted to reporters that the epidemic had a serious impact on the automobile industry, and it also affected the supporting market of the tire industry.
"The supporting market accounts for 20% to 25% of the domestic tire production, but how much impact it has on the supporting market, so far no company has given first-line intuitive data feedback."
The reporter interviewed a number of tire listed companies, and the company responded that the shutdown of car companies has an impact on the company, but the specific data has not been counted, so the reporter should pay attention to the company's quarterly report data.
Tire companies are "unprofitable"
Under the circumstance that the cost of raw materials is pressing step by step, the terminal price increase is difficult to achieve, and the demand is further cold, tire companies are facing the dilemma of "unprofitable".
"The price of raw materials is still running at a high level this year. Especially since March and April, the price of carbon black has further increased, and the cost of tire factories is extremely under pressure, but on the other hand, the demand side, its sales demand is difficult to keep up." Zhu Zhiwei told reporters, "The factory keeps increasing prices, but the demand cannot keep up with the terminal price increase, which makes the profits of tire companies continue to be compressed, and tire companies are obviously in a state of 'unprofitable and limitless'."
It is reported that, affected by factors such as raw material prices and rising tire manufacturing costs, although tire companies have initiated multiple rounds of price increases since 2021, due to factors such as declining demand in the end market, tire companies’ price increases are difficult to transmit to the end market. Ineffective price increase" situation.
Sailun Tire also stated that since 2021, in the face of pressures such as rising raw material prices and sea freight prices, companies in the tire industry have frequently issued price adjustment announcements, and prices have risen many times.
Despite the continuous adjustment of tire prices, statistics from industry associations show that the overall profit of the tire industry is still down year-on-year.
According to the disclosed annual report data of listed companies, in 2021, the net profits of four companies including Guizhou Tire, Senturin, Sailun Tire, and Dishengli will all decline year-on-year. Among them, Guizhou Tire has the highest decline of 67.52%.
Zhu Zhiwei told reporters that although the export market of tire companies has been slowly recovering since the Spring Festival this year, the overall shipment situation is still not as good as the same period of previous years. Judging from the situation of new foreign orders in March, the market is not very concerned about the export situation in the first half of the year. optimism.
From the perspective of the domestic market, the decline in production caused by the shutdown of automobiles has affected the decline in the demand for tire accessories. In addition, the tire replacement market has also been affected due to poor epidemic control and logistics.
The data shows that in March 2022, China's logistics industry prosperity index was 48.7%, a decrease of 2.5 percentage points from the previous month; China's warehousing index was 46.9%, a decrease of 4.4 percentage points from the previous month.
According to the monitoring data of Zhuochuang Information, the tire inventory of enterprises is currently high. As of the end of March 2022, the total inventory of semi-steel tire sample enterprises was 18.63 million, an increase of 9.07% month-on-month and a year-on-year increase of 15.77%.
The total inventory of all-steel tire sample companies was 12.435 million, an increase of 8.81% month-on-month and a year-on-year increase of 41.34%, which also means that domestic tire companies have huge sales pressure in the short term.
The market remains bullish on its prospects
"In 2022, the tire industry is changing from a comfortable state in previous years to a difficult period, and the industry is also accelerating its reshuffle." Zhu Zhiwei believes.
"Since the outbreak of the epidemic in 2020, stimulated by favorable policies, the sales of domestic tire companies have been relatively good. Although the dividends will subside in 2021, the overall demand, including domestic sales and exports, has provided better support for tire sales." Zhu Zhiwei said , "From the perspective of this year, the tire industry in the first half of the year or the whole year will face the pressure of 'unprofitable' and enterprises will enter a difficult period of development."
However, regarding the market prospects of the tire industry, Zhu Zhiwei believes that the market is not so pessimistic about the development prospects of tire companies. Although the industry is developing difficult, there are still some outside funds staring at the industry.
"After all, new energy vehicles have great potential for development in the future, and the demand for tires is still there."
Sailun Tire said that the overall pressure on the tire industry has intensified the reshuffle speed of domestic tire companies to a certain extent.
In 2021, a number of small and medium-sized tire companies have gone bankrupt, but some domestic tire leading companies still choose to continue to expand production capacity, and actively adjust the tire product structure to actively develop in a green direction with high quality and low energy consumption.
Sentury also believes that the strong development momentum of new energy vehicles has provided good market opportunities for the company's development.
"Large companies may acquire more small companies this year. In addition, some leading tire companies are currently accelerating the pace of developing new factories, including the layout of overseas factories." Zhu Zhiwei further said, "The layout of domestic tire factories is mainly to New energy vehicles are tilted.” (Securities Daily)Keywords: