2025 is the final year of the “14th Five-Year Plan”. The China Rubber Industry Association recently officially released the “Guiding Outline of the Rubber Industry’s “15th Five-Year Plan” Development Plan” (hereinafter referred to as the “Outline”).
This programmatic document provides a clear roadmap for the national level to regulate the tire industry, and clearly releases the signal of “strong supervision and promotion of integration”: the industry will completely bid farewell to the extensive growth model of winning by quantity, and fully shift to a new stage of high-quality development of “high-end leadership, green transformation, intelligent empowerment, and international collaboration”.
Policy measures: curb blind expansion and promote “reduction and replacement”
In response to the problems of overcapacity and low-end duplication of construction that have long plagued the industry, the “Outline” proposes strong policy intervention measures.
At the national level, it is clearly proposed to curb the blind addition of production capacity, implement the “reduction and replacement” policy, and use energy consumption, emissions, and technology as core indicators for project approval.
The “Outline” recommends establishing production capacity early warning and negative lists, and implementing differentiated credit policies, aiming to seal off the living space of backward production capacity from the source.
This move marks that China’s tire industry has entered the deep-water zone of supply-side reform focusing on “stock optimization”, indicating that the industry reshuffle will be fully accelerated.
Goal decoding: Ten years to become a powerful country and “incubate” giants in batches
The “Outline” proposes a strategic framework of “1 + 6 + 6 + 6”, in which the core overall goal is: striving to become a powerful tire manufacturing country after ten years of hard work.
In order to achieve this leap, the “Outline” sets extremely challenging quantitative indicators: by 2030, cultivate 3-4 demonstration leading companies to enter the top ten in the world.
This indicates that the aggregation of resources to leading enterprises will become the norm, and strengthening national brands and cultivating internationally competitive enterprise groups has become a top priority at the national strategic level.
In addition, “the security and controllability of the entire industry chain” has been elevated to a strategic level. Improving the self-sufficiency rate of key raw materials and breaking through “stuck neck” technologies will become the key for enterprises to build a moat.
Breakthrough on the track: New energy and aviation tires have become the focus of the breakout
The “Outline” does not engage in “one size fits all”, but deploys six key projects in a differentiated manner to accurately lock in the structural opportunities of subdivided tracks:
Passenger tires seize the dividends of new energy:
It is clear that the market share of domestic brands in the mid-to-high-end market needs to increase by more than 20%, and the focus is on increasing the penetration rate of original equipment tires specially designed for new energy vehicles, aiming to achieve overtaking in corners on the new energy track.
Exploring the full life cycle value of truck and bus tires: Promote the transformation to “selling services” with the goal of increasing the mileage of mainstream products by 15% – 20%. Companies with full life cycle solution capabilities will receive higher premiums.
Original tires and aviation tires focus on independent controllability: the standard proportion of smart tires for large mining trucks is planned to increase by more than 50%; aviation tires must be supplied in batches for domestically produced large aircraft to ensure national strategic security.
Reform path: “Addition, subtraction, multiplication and division” to reshape the industry landscape
Faced with overcapacity and low-end competition, the “Outline” prescribes four prescriptions of “addition, subtraction, multiplication and division”:
Addition: Increase R&D investment, high-end products and brand value, and build full-link digital forward design capabilities.
Subtraction: Reduce low-end production capacity. It is expected that the production of bias tires will decrease at an average annual rate of 4.3% by 2030.
Multiplication: Multiply efficiency and benefits with intelligent manufacturing and achieve intelligent transformation of the entire chain.
Do division: Eliminate backward enterprises and clear market obstacles.
The “Outline” predicts that by 2030, the total tire output will reach 1.025 billion.
Among them, the compound annual growth rate of passenger radial tires is expected to be 4.7%, which is much higher than the 0.5% of all-steel truck radial tires.
This data difference reveals the future growth pole: passenger tires, especially the new energy supporting field, will be the main source of increase, while the commercial tire market will rely more on stock replacement and value mining.
Industry analysts believe that the release of the “Outline” marks that China’s tire industry has entered a new cycle of “stock game and value is king”.
Under the strong guidance at the national level, the road to low-price competition has been blocked. Only by entering the high-end market through technological innovation and overcoming trade barriers through green and low carbon can enterprises win in the reshuffle of the “15th Five-Year Plan”.
