In June, China’s
domestic tire market sales environment continued to be improved. Tire markets
in many regions recovered orderly, and sales volume increased with the gradual
delivery of orders accumulated in the early stage. However, the end demand in
many regions was barely boosted. Coupled with the impact of the rainy days, more
agents’ sales volume decreased from last month.
Introduction of Sample
As for China’s
domestic all-steel sales volume, SCI has surveyed a total of 62 domestic first-level
and second-level agents, including 39 first-level agents and 23 second-level agents.
The areas covered by the survey include Shandong, East China (Jiangsu,
Shanghai, Fujian, Anhui), Northeast China (Liaoning, Jilin, Heilongjiang),
North China (Shanxi, Hebei, Inner Mongolia), South China (Guangxi, Guangdong)
and Central China (Hunan, Henan). 14 provinces (municipalities and autonomous
regions) are covered.
Due to the different
regions of the samples selected in the survey, different local road conditions,
and different agents’ recognition of tire brands, the product brands
represented by the agents in the survey samples are different, and these brands
are at different levels. The proportion of foreign brands and domestic brands
(including brands with three guarantees and brands without three guarantees) is
shown in the chart below. Among them, foreign brands include Goodyear,
Bridgestone, Michelin, etc.; brands with three guarantees include Celimo,
Westlake, Yartu, Chaoyang, Double Coin, Aeolus,
etc.; brands without three guarantees include Santai, Hengfeng, Huasheng, Jinlipu
and some OEM brands, etc.
M-O-M Change in Sales
Volume
According to the
survey results, over half of the agents had sales volume decline this month.
Increased or stable sales
volume: First, there were differences in the sales situation of the sample agents.
A few agents had sales volume decline last month and enjoyed passable orders
this month, so their sales volume this month increased compared with that of
last month. Second, with the steady recovery of the tire market in some regions
this month and the successive delivery of the backlog of orders in the early
stage, agents’ sales improved. Third, agents made the final sprint for the semi-annual
sales task, and their promotion gave a certain boost to the sales volume.
Decreased sales
volume: First, last month, driven by the atmosphere of market price rise, the
intention of replenishment in the trade sector was high. This month, the price
rising sentiment gradually subsided. Besides, the end demand saw no significant
improvement, and the consumption of social inventory was slow, so traders were
unable to continue to replenish the inventory this month. As a result, most agents
had sales volume decline. Second, there was more rain in the south of China,
which hindered the local logistics and transportation, thus affecting the
consumption of tires. Third, some traders adjusted their structure of brand by deliberately
reducing the volume of some brands with low cost performance, resulting in
lower sales volume than that last month.
Forecast
SCI holds that
different agents may have different performances regarding sales volume M-O-M
change, and the possibility of increase, decrease or no change is equally like.
First, some agents were under the pressure of semi-annual tasks this month, so their
promotion drove up the overall sales volume, which partly overdrew the sales
volume next month, reducing the sales volume next month. Second, the current
logistics and transportation industry is facing multiple problems such as
supply and demand mismatch, low freight rates and insufficient transportation
capacity, which inhibits the demand for tire replacement to a certain extent,
and it is difficult to increase tire consumption. Driven by the price increase
atmosphere in the early stage, agents reserved sufficient inventory. However,
most agents had sales volume decline this month. Next month, the high-level
inventory may be depleted after nearly two months of consumption, and agents’
sales volume may increase. Fourth, the hot weather is expected to speed up tire
wear and tear, which will help increase the intention to replace tires. Fifth, by
getting rid of the influence of external factors such as rain, the recovery of
the sales environment in some regions is expected to help the transmission of
tires.