Industry

What the industry sells

A tyre is a consumable safety component. It wears out on a schedule set by kilometres driven, not by the vehicle's replacement cycle, which means the industry has two distinct demand streams sitting on top of one another. The first is original equipment (OE): tyres sold to a vehicle manufacturer and fitted on the assembly line, priced against competing suppliers on cost and reliability of supply. The second is replacement: tyres sold through distributors and retail stores to the person who already owns the vehicle, where brand recognition, quality reputation, responsiveness and an after-sales service network do the differentiating. Prinx Chengshan's own listing document states the split plainly — in OE, "competitive price and reliable supply capacity are placed at top priorities", while in replacement, brand, "trustable quality, innovation and quick reaction capability, as well as well-developed distribution and sales channel and after-sale service system are crucial" [1].

Products divide into three families by construction:

• All-steel radial tyres, also called truck and bus radial or TBR. Fitted to medium and heavy trucks, large buses, semi-trailers and some light trucks [2].
• Semi-steel radial tyres, or passenger car radial (PCR). All passenger vehicles and a small share (under 10%) of commercial vehicles, mainly light trucks and mini vans [3].
• Bias tyres, an older cross-ply construction for heavy loads on poor surfaces — mines, quarries, tunnels, agricultural and industrial use. A shrinking residual: China's radialisation rate reached 96% of automotive tyre output in 2025 [4].

A fourth family, off-the-road (OTR) tyres for mining and construction machinery, sits adjacent and carries higher unit prices; Prinx Chengshan began trial production of its first OTR line in the fourth quarter of 2025 [5].

The economic organising principle is that a tyre maker is a rubber converter with a brand and a distribution network attached. Raw materials dominate the cost line, plants are capital-intensive and want to run flat out, and the difference between a good year and a bad one is mostly the gap between input prices and realised selling prices — a gap that opens and closes with a lag.

The value chain and where the money sits

Four inputs account for most of the bill of materials: natural rubber, synthetic rubber, carbon black and steel cord [6]. At the time of listing, raw materials were 68.2%, 74.5% and 78.4% of total cost of sales in 2015, 2016 and 2017, with rubber alone at 35.4%, 39.4% and 43.2% [7] [8]. Nothing structural has changed since: in FY2025 raw materials and consumables were ¥8,400.2 million against ¥10,683.6 million of total cost of sales and operating expenses [9].

Sources: raw materials and consumables used, RMB6,209,793 thousand in FY2021 to RMB8,400,212 thousand in FY2025, per the expenses by nature note in the FY2021, FY2023 and FY2025 annual reports [10] [11] [12]; the revenue denominators, RMB11,806,801 thousand in FY2025 back to RMB7,537,161 thousand in FY2021, from the five-year profit or loss summary [13]; the reported gross profit margin series of 18.1%, 21.2%, 21.3%, 14.3% and 13.8% from the five-year key financial indicators [14], with the FY2025 decline explained in the financial review [15]. Ratios derived.

Raw material intensity is a blunt instrument — inventory sits between the purchase and the sale, so the cost line lags the spot market and price increases lag cost growth again behind that [16] — but the shape is the industry's shape. The two years when the input share was highest, FY2021 and FY2022, were the two years of thinnest margin.

Input prices did not move together in 2025. Triangle Tyre's annual report plots natural rubber opening the year near US dollars 2,000 per tonne before falling back below US dollars 1,750, while synthetic rubber and carbon black traded below their 2024 levels for most of the year and steel cord did so only through July [17].

Source: values read from the natural rubber price chart (Singapore Exchange data) in Triangle Tyre's FY2025 annual report; figures are approximate to the plotted series [18].

Downstream of the plant, output flows through two channels with materially different economics. Prinx Chengshan sold 83.7% of FY2025 revenue through distributors — 17.6% domestic and 66.1% international — and 16.3% direct to vehicle manufacturers [19]. The replacement leg terminates in a retail network the manufacturer does not own but does organise: 126 domestic distributors, 25,389 registered retail stores, and 8,078 stores enrolled in the company's dealer app as of the end of 2025 [20].

Two of the six Chinese makers in this corpus disclose gross margin by channel, and both show the replacement channel earning more than OE. Every one of the six shows overseas sales earning more than domestic sales.

Sources: FY2025 annual reports — Sailun [21]; Linglong [22]; Triangle [23]; Jiangsu General [24]; Guizhou [25]; Prinx Chengshan segment results divided by segment revenue [26].

The bases are not identical and should not be read as one series. Prinx Chengshan reports two geographic segments defined by operating location — the Shandong plant and the Thailand plant — so its split is by where the tyre was made [27]. The A-share peers split by where the tyre was sold. Both cuts point the same way, but they answer slightly different questions.

Market size, and what the numbers actually measure

There is no single agreed measure of this market, and the two credible bases in this corpus are five years and one definition apart.

The most recent read comes from Sailun's FY2025 annual report, which uses Michelin's published market data: global tyre sales of roughly 1.9 billion units in 2025, with Europe at 27.6% and North America at 22.87% of global volume — together more than half — and Europe up 0.54% while North America fell 0.57%. China's passenger and truck and bus tyre sales totalled about 382 million units, up 5% [28].

The older read comes from Prinx Chengshan's 2018 listing document, commissioned from Frost and Sullivan: global automotive tyre sales of 3,039.0 million units in 2017, growing at a 3.3% compound rate from 2012 and forecast at 2.0% to 2022; China at 609.0 million units in 2017, growing at 9.0% from 2012 [29] [30].

The gap between 3.0 billion and 1.9 billion units is scope, not decline: the Frost and Sullivan series counts all automotive tyres including bias and every vehicle class, while the Michelin-based series counts the passenger, light truck and truck and bus categories the major manufacturers compete in. Any share estimate is only meaningful against one of these denominators, stated. This tab does not compute a global share for any company, because the corpus does not contain a single consistent global denominator and a company-level global volume for the same year.

Inside China, the annual statistics are firmer, and 2025 is the year the growth stopped.

Sources: National Bureau of Statistics and General Administration of Customs data as quoted in Prinx Chengshan's FY2025 annual report [31]; sector revenue and profit change from Triangle Tyre's FY2025 annual report [32].

Output of 1.207 billion rubber tyres grew 0.9%, against 9.2% the year before [33] [34]. Exports of new pneumatic rubber tyres reached 702 million units, up 3.1%, but export value rose only 1.8% to ¥161.123 billion — unit export prices fell [35]. Within that, passenger car tyre exports actually declined 1.9% to 342 million units while truck and bus tyre exports rose 2.7% to 130 million [36]. Across the whole rubber and plastics products sector, China's National Bureau of Statistics recorded revenue down 1.4% and total profit down 5.9% [37].

The same statistic, three different numbers

Four of the makers in this corpus quote 2025 industry data from different trade sources, and the numbers do not reconcile. This matters for anyone building a model off a single filing.

Sources: Prinx Chengshan FY2025 annual report, on all-steel output of 149 million units and semi-steel utilisation of 74.03% [38]; Linglong FY2025 annual report [39]; Triangle FY2025 annual report [40]; Guizhou FY2025 annual report [41].

The utilisation lines deserve particular care. Sublime China Information and the China Rubber Industry Association's tyre branch survey different plant populations, so their levels differ by roughly five percentage points in both product categories — and for semi-steel they disagree on the size of the fall, 3.62 points against 9.6. Levels from different providers cannot be chained into one series, and even the same provider's level has been restated: Prinx Chengshan's FY2024 report gave all-steel utilisation of 58.5%, while its FY2025 report gives 69.23% described as up 4.72 points [42] [43].

Who pays, and where the volume ends up

Demand comes from two places and neither is the driver. OE demand tracks new vehicle build; replacement demand tracks the vehicle parc and how hard it is driven. China produced 34.53 million vehicles and sold 34.40 million in 2025, up 10.4% and 9.4% — a record — with commercial vehicles back above 4 million units at 4.261 million produced, up 12% [44] [45]. New energy vehicle production and sales reached 16.626 million and 16.49 million units, up 29% and 28.2%, a 47.9% share of new sales. The parc reached 366 million vehicles, of which new energy vehicles were 43.97 million, or just over 12% [46].

The gap between those two numbers — a 47.9% share of the flow against a 12% share of the stock — is the shape of the next decade of replacement demand.

For an exporter, the destination map is a better guide than the segment map. Prinx Chengshan reports revenue by the region where goods were delivered:

Source: FY2025 Annual Report, Note 5 Segment Information — revenue by geographical location [47].

The Americas took ¥3,901.9 million, or 33.0% of revenue, in FY2025 — almost exactly the domestic share [48]. This is the arena's central exposure: the industry's marginal buyer is American or European, and both are raising the cost of entry.

The players that matter

The listed Chinese tyre makers with filings in this corpus, ranked by FY2025 revenue. All figures are in renminbi, all are calendar-year, and all five A-share peers were confirmed from their own filings to run the same model — radial tyre manufacture sold through a mix of OE and distributor-led replacement channels, with an overseas production base — Triangle's is the exception, a Cambodian plant of 6 million semi-steel and 1 million all-steel radials still under construction through 2026 [49].

Sources: FY2025 annual reports — Sailun [50] [51]; Linglong [52] [53]; Guizhou [54] [55]; Triangle [56] [57]; Jiangsu General [58] [59]; Prinx Chengshan [60] [61]. Growth rates as reported.

Three comparability caveats attach to that table. The A-share companies report gross margin on main business revenue while Prinx Chengshan's 18.1% is on total revenue; Sailun's margin covers tyre and rubber products together; and Jiangsu General's 22.1% revenue growth against a 46.1% profit decline reflects volume bought at prices that did not cover it, with domestic sales carried at a negative 2.67% gross margin [62].

Two absences are worth naming. Zhongce Rubber (603049), China's largest tyre maker by output and a direct competitor in budget-tier truck and bus replacement, appears in this run's peer list but has no filings in the corpus, so it is not benchmarked here. And the global majors — Michelin, Bridgestone, Goodyear — appear only as data sources and as the reference point Chinese brands are measured against; their own filings are not in the corpus, so the premium tier's economics cannot be quantified from primary documents.

The concentration picture is old but structurally informative. At the time of Prinx Chengshan's listing, the top ten domestic-brand players held 26.6% of Chinese all-steel radial volume, and the majority of domestic producers were described as sub-scale and competing in medium and low-end segments [63]. The barriers that keep the top of the industry stable are certification (CCC domestically, DOT in North America, ECE in the European Union) and capital — the Ministry of Industry and Information Technology's tyre policy sets a minimum of ¥1.0 billion of investment for an annual capacity of 1.2 million radial tyres [64]. Qualifying as a supplier to a vehicle manufacturer adds an assessment period lasting many years [65].

The lines this industry divides on

Trade remedies, and the geography they price

The single most consequential structural force is that duties are levied on where a tyre was made, not on who made it. That converts plant location into a pricing variable and has driven a decade of offshore capital spending.

Sources: Prinx Chengshan FY2025 annual report, Risks and Uncertainties — the 17.06%, 4.52% and 5.08% Thai passenger and light truck rates [66], the 12.33% truck and bus rate and South Africa’s 6.61% preliminary rate [67], and the 15% Pillar Two minimum rate [68]; Sailun investor meeting record, 1 September 2025 [69]; Linglong FY2025 annual report [70]; Linglong FY2024 annual report [71].

Two definitions that recur across these filings. A "double investigation" (双反) is a paired anti-dumping and countervailing duty case — the European Union opened the anti-dumping half against Chinese passenger and light truck tyres on 21 May 2025 and the countervailing half on 6 November 2025, and from 22 January 2026 required import registration so that duties can be applied retroactively [72]. An anti-circumvention case, like South Africa's, asks whether goods nominally from a third country are really Chinese goods routed through it; a preliminary 6.61% rate applies to Prinx Thailand while it is decided [73].

The industry's answer has been to move plants. The share of overseas capacity among China's top ten tyre companies rose from 18% in 2020 to 35% in 2023 [74]. Sailun, the first Chinese maker to build abroad, now has planned overseas capacity of 11.1 million truck and bus radials, 62 million passenger radials and 110,000 tonnes of off-road tyres across Vietnam, Cambodia, Indonesia, Mexico and Egypt [75]. Prinx Chengshan's own second offshore base, in Kedah Rubber City, Malaysia, is 6 million passenger radials and 600,000 truck and bus radials for a total investment of US dollars 299 million, with trial production expected in the fourth quarter of 2026 [76].

The exposure gap is arithmetic. In FY2025, 66.1% of Prinx Chengshan's revenue was denominated in US dollars or euros [77], while the Thailand base generated 38% of revenue [78]. The difference is hard-currency revenue produced inside the tariff perimeter.

Domestic overcapacity against export pull

Chinese producers describe the home market and the export market as two different games. Jiangsu General's FY2025 report names the domestic condition directly: structural overcapacity and rising manufacturing cost producing "price involution" on homogeneous products, while multinationals hold the high-end tier behind technology and brand barriers [79]. Guizhou Tyre describes an industry running with overcapacity, volatile input prices, slowing demand and trade barriers simultaneously [80]. Prinx Chengshan itself described the shift in FY2022: "The tire industry as a whole is in an oversupply situation, and market competition has shifted from incremental competition to stock competition" [81].

The spare capacity is not evenly distributed. Industry-wide utilisation in 2025 sat near 69% for all-steel and 74% for semi-steel [82], while Prinx Chengshan's own plants ran at 93.8% and 92.6% in Shandong and 80.6% and 92.5% in Thailand [83]. The idle lines sit in the industry's tail, which is where the price pressure originates.

Cost pass-through, and its lag

Raw material moves reach the income statement one to two quarters late, and selling prices move later still. Prinx Chengshan's FY2021 report is the clearest statement of the mechanism: input prices rose sharply, "the increase in raw material prices has not been fully transmitted to the selling price, resulting in a decline in the profit margin of the tire industry from the domestic market" [84]. The FY2024 report shows the same mechanism splitting the two product lines in one year: all-steel faced "dual pressures of oversupply and ineffective cost pass-through" with natural rubber up 22%, while semi-steel demand was strong enough that "pricing mechanisms" operated smoothly and margins held [85].

Pass-through is a live issue rather than a historical one. At Sailun's 8 May 2026 investor meeting, management answered a question on how it was handling rising raw material costs by saying, in terms, that it had already raised prices [86].

Standards, certification and the green barrier

Beyond tariffs, market access is increasingly gated on compliance rather than price. Product certifications — CCC, DOT, ECE, plus voluntary marks such as UN Regulation 164 for studded winter tyres and TÜV SÜD approval — are the entry ticket [87] [88]. Linglong's FY2025 report names the newer layer: the European Union's deforestation regulation, deferred to the end of 2026, will require rubber-containing products to prove a deforestation-free supply chain, forcing traceability systems across the whole chain, with the carbon border adjustment mechanism behind it [89] [90]. Tax rules have joined the list: OECD Pillar Two is now in force in Thailand, Malaysia and Europe, imposing a 15% minimum effective rate on groups above EUR 750 million of revenue, and Prinx Thailand has already provided for it [91].

Domestically, policy has pushed the same direction: China's carbon peaking and neutrality targets accelerated the elimination of outdated capacity and, on Prinx Chengshan's reading, raised industry concentration [92].

Where the cycle sits

Read across five years and six sets of accounts, this is an industry that has just turned over after a two-year margin peak, with volume still rising.

Sources: FY2023, FY2024 and FY2025 annual reports, Industry Dynamics [93] [94] [95]; Prinx Chengshan sales volume of 18.6 million sets in 2021 [96], 18.5 million in 2022 [97], 25.0 million in 2023 [98], 28.0 million in 2024 [99] and 29.3 million in 2025 [100]; gross margin as reported, 13.8%, 14.3%, 21.3% and 21.2% for 2021 to 2024 in the FY2024 key financial indicators [101] and 18.1% for 2025 in the FY2025 financial review [102]. Utilisation levels for 2023 and 2024 come from a different provider than 2025 and are not a continuous series; 2021 and 2022 industry statistics were not disclosed in these reports.

The sequence the filings describe:

2021 — cost shock. Raw material and energy prices rose, China's dual-control energy policy limited electricity use and production, shipping prices rose sharply, and price increases lagged. Prinx Chengshan's gross profit fell 25.8% on a 20.0% revenue increase; group gross margin was 13.8% [103] [104].

2022 — demand trough. Chinese commercial vehicle production and sales fell more than 30%, domestic replacement demand was weak, and the industry moved from growth competition to share competition. Freight normalised in the second quarter, which helped, but North American replacement demand fell away in the second half [105].

2023 — the upswing. China's tyre output rose 15.3% to 990 million units and exports 11.8% to 620 million, while raw material and freight costs fell and the renminbi weakened [106]. Semi-steel utilisation reached 69% and all-steel 60.2%. Prinx Chengshan's gross profit rose 81.4% and profit attributable to owners 162.4% [107].

2024 — the peak, already splitting. Output rose 9.2% and exports 10.5%, but all-steel and semi-steel diverged: all-steel production fell 2.26% with utilisation at 58.5% under weak logistics demand and 22% higher natural rubber prices, while semi-steel production rose 8.04% at 76.1% utilisation on new energy vehicle growth [108].

2025 — volume up, profit down. Output growth fell to 0.9%, export value grew slower than export volume, and five of the six listed makers in this corpus reported lower net profit — Sailun down 13.3% [109], Linglong 21.9% [110], Prinx Chengshan 17.1% [111], Triangle 16.3% [112] and Jiangsu General 46.1% [113], with only Guizhou roughly flat at plus 0.7% [114]. Four of the six saw gross margin contract. Guizhou's summary of the year — pressure in the first half, repair in the second, with structural differentiation intensifying — matches what the others describe [115].

The company-level version of that turn is visible in Prinx Chengshan's two production bases. The Thailand base carried a gross margin premium over Shandong in every year from FY2022, but that premium narrowed sharply in FY2025 as US duties on Thai-origin tyres took effect.

Source: derived from segment revenue and segment results in the FY2023, FY2024 and FY2025 annual reports [116] [117] [118] [119].

As of the FY2025 report date, order books had begun to diverge by base and product: all-steel orders at Shandong were described as sufficient while its semi-steel orders declined; at Thailand, all-steel orders were slightly weak while semi-steel held at normal levels [120].

Three currents running through this arena

The tariff wall now prices geography, and the industry is rebuilding its map around it. Overseas capacity among China's top ten went from 18% to 35% of the total between 2020 and 2023 [121], and the destinations have widened from Thailand and Vietnam to Cambodia, Indonesia, Mexico, Egypt, Hungary and Serbia [122] [123]. Each new location is a bet that the destination market's duty regime holds for the life of the asset — a bet that anti-circumvention cases such as South Africa's, and origin enforcement across Southeast Asia from September 2025, are designed to test [124] [125].

Product mix is moving faster than volume. Tyres of 17 inches and above were 44% of Chinese demand in 2024 as new energy vehicle penetration passed 40% [126]; Prinx Chengshan's own share of 17-inch-and-above products reached 51% in 2025 [127]. New energy vehicles impose specific requirements — low rolling resistance, higher load bearing, lighter construction for range — which the industry has responded to with dedicated product lines [128] [129]. Mix upgrade is the industry's stated answer to a price environment it cannot control.

The commercial and passenger halves are on different clocks. In 2024 all-steel output fell while semi-steel rose; in 2025 that reversed, with all-steel production up roughly 7% on export and OE strength while semi-steel growth slowed to 1.33% and its utilisation fell, hit in the fourth quarter by the European anti-dumping investigation [130] [131]. For a maker with 56.5% of revenue in all-steel and 41.8% in semi-steel, the two halves rarely peak together [132].

What the record here cannot settle

Market share cannot be computed on a current basis. The only company-level share data in the corpus is Frost and Sullivan's 2017 ranking from the listing document, which anonymises every competitor except Prinx Chengshan itself and covers only all-steel radial tyres sold in China [133].

Profit pools cannot be allocated across the chain. The corpus contains no financial statements for rubber producers, carbon black or steel cord suppliers, distributors or retail chains, so the split of industry profit between input suppliers, manufacturers and the channel is not measurable from primary documents here.

Peer margins are not strictly comparable. The A-share filings report gross margin on main business revenue and split it by sales region; Prinx Chengshan reports on total revenue and splits by production base. The direction of the overseas premium is consistent across all six, but the levels are not like for like.

Utilisation series break. Different trade data providers give different levels for the same year, and levels have been restated between one annual report and the next, so no continuous multi-year industry utilisation series can be constructed from these filings.

The company's own record against these forces is set out in Competition and History; this page covers only the arena they are contested in.