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Last month, President Barack Obama’s ruling on China’s taxation of car tires and light truck tires to the United States caused a huge blow to the Chinese tire industry. Liu Zijin, general manager of Qingdao Fulin Tire Co., Ltd., told reporters that the impact of the special security case on the tire industry was devastating. Because semi-steel tires of domestic tire companies have just developed in recent years, foreign brands account for more than 70% of the domestic market. Domestic brands do not have a large share in the domestic market, and most of them export, and they mainly use the US market. It is not easy for the market to enter, and it is not easy to transfer these tires to the domestic market or other overseas markets within a short period of time. The development of semi-steel tires in many domestic enterprises is still in its infancy. Under this attack, it is likely to die.
In view of this, all tire companies have expressed that they can't give up on the US market, but not giving up does not mean selling tires at a reduced price. According to Ge Guorong, deputy general manager of Hangzhou Zhongce Rubber Co., Ltd., if a company cuts prices, it will be equivalent to taking its own blood and sweat to subsidize the United States. If the interests of the United States are not lost, they will think that their decision is correct. Therefore, it is necessary to raise the price of tires in the United States and let them pay a price. He analyzed that at least six months, the tires needed by the US market cannot be immediately remedied. Many specifications and models are currently only available in China, and the US market will definitely be out of stock. "Our mentality needs to be adjusted. There is no need to maintain the past export volume to the United States, at least in the short term."
Liu Zijin also has the same view, he believes that for the US market, tire companies should fight for a protracted war. “Because Chinese tires were mainly exported to the United States from May to July, the U.S. Joint Steel Workers’ Union thought that the 55% tariff they proposed at the time was not enough to crack down on China, and it also proposed to the U.S. government that it impose a tariff of 70% to 80% on Chinese tires. Distributors can import goods from China at the end of the year, so price cuts are useless, their stocks of tires are still trying to raise prices, and domestic companies are not likely to cut prices by 35%, and prices will fall by 10%. Therefore, the price war is not the way out for the tire companies. When their inventory is consumed, it is the time for us to compete with the Americans.†He analyzed that even if other manufacturers can fill the gaps in Chinese tires, it will take some time. Now the tires in the US market have risen by more than 10%, so the industry must unite and fight for a protracted war. He proposed that the current US tire production line should stop production, not exporting to the United States, and wait until their inventory is exhausted before they hit the second phase of the war of attrition. The third phase is a counterattack. "If we fight back successfully, we can also take the opportunity to pull up the tires and let American consumers pay."
Li Farong, deputy general manager of Triangle Group Co., Ltd., also believes that consumers in the United States will definitely have a comparison. The cost-effectiveness of Chinese tires is still good. “The overall price of Chinese tires in the U.S. market is very low. In September, some multinational companies raised their prices in the U.S. market by more than 15%. They raised, why can we not mention? At present, there are some specifications for China. This is an opportunity. Now that we are in, It is not easy to give up the US market.†Li Wei, deputy general manager of Delicate Group, also agreed that he said that the average price of tires exported to the United States is only around US$ 30, and there is room for price increases.
Ge Guorong told reporters that the total world demand is constant, the US market is empty, and factories in other countries will go to supplement, then there will be vacancies in other markets, but in this process Chinese tire companies must be self-disciplined and cannot be confused by themselves. Yourself. He believes that bad things can become a good thing and can speed up the pace of brand promotion for domestic companies. “Our tires are very cheap, and compared with the international giants, the price difference of each tire is 30% to 40%, so we are not faced with price issues, but rather issues of reputation and reputation. Companies should not throw money at prices. In the war, we should build a brand.This year, China's car production will reach 8 million, supporting 40 million tires, plus the market, this market is very big. Therefore, tire companies should work hard to improve the quality, It is necessary for domestic consumers and car manufacturers to recognize that Chinese tires are good.†He also stressed that Chinese companies should not fight price wars in other overseas markets. "If companies cut their prices by 2% today and they cut prices by 3% tomorrow, the Chinese tire industry will face big problems."
Cai Weimin, secretary-general of the China Rubber Association tire division, said: "China, as the world's largest tire producer and exporter, has long been exporting at a relatively low price. As a result, money has been earned by others. In turn, it is worth noting that we are dumping. He believes that enterprises should determine the reasonable export prices for "higher prices and higher shipping prices" according to market rules. In addition, he also called on the country to rectify and standardize the tire export trade market and take strong measures to reverse the situation of thousands of households exporting, low-cost, and disorderly competition; enterprises should optimize their export structure and use their own brands to achieve The value, high quality and price. Cai Weimin proposed that the proportion of domestic tires should be increased. Support is not only a problem, but the key is to promote product upgrades. "Only relying on technological progress, upgrading tire quality and service quality, and forming competitive products with independent intellectual property rights can enhance the competitiveness of the international market," Cai Weimin stressed.
Tire industry to discuss with a protracted war to adhere to the US market
“The US market must not give up lightly, but it must not lower its price to protect the market. The Chinese cannot use their own money to subsidize Americans. Although the WTO lawsuit takes as long as two years, the industry must go for a defense and the Chinese must This ambition is that in the critical period when the industry encounters great difficulties, both in the domestic market and in the international market, we should all maintain our confidence, hold the group to fight, turn pressure into a driving force, strengthen industry integration and self-discipline, and standardize the market." It was at the end of last month that the Tyre Industry Corporation held a consensus on the Tire Industry Business Work Conference 2009 held by the Tire Branch of the China Rubber Industry Association.