China Tires: Technology, Quality and Prejudice

China's car tire industry needs a PR expert to help it retrieve a major developing problem.

That problem is the increasing prejudice against any tire made in China. I don't just mean China-branded tires, but the same prejudice is starting to attach itself to premium-brand tires made in the country.

[inlinead]

I'm a qualified engineer and have been observing the global tire industry for over 25 years. I'm not sure I've seen such a miscarriage of justice ever in my time in this business. So I have decided to speak out.

First, the generalisation of tires made in China is grossly unfair. Do we believe that all tires made in Europe are of the best quality, irrespective of manufacturer? I think not. We look at the brand before making a snap decision. Those of us who know the industry might even look at the factory of manufacture to further discriminate the good from the bad.

And so it is in China. There are around 250 to 300 tire makers in China – excluding bicycle tires, implement tires and so on. Most have just one factory. Some of these have good systems and good personnel. Others need to make progress in this area. Probably over half of them need to make a lot of progress. This latter category is likely to face pressure to close during 2014 or 2015.

Irrespective of this, all car tire makers in China seem to be branded with the same reputation for poor quality.

I've just come back from there and talked with a number of tire makers – some Chinese-owned, some joint ventures and some wholly owned by foreign companies – some premium brands among them.

Here's the thing, even within the corporate structures of those premium tire makers, the China factories have to be better than the German ones before anyone will believe that they make good products. Not only that, but a single mistake on quality or delay in the delivery schedule will stick with them for longer than a similar incident in a German factory.

I'm here to explain why.

Tire tests

In pretty much every comparative car tire test you see published in Europe, Canada or the USA, the China-branded tires come out badly. Last August Auto Bild even compared premium brand car tires made for the Chinese market against a premium brand tire made for the European market.

Guess what? The China tires came out badly.

I don't dispute that, and I would certainly not put those tires on my car, nor would I recommend them to any of my European friends.

But that does not make them bad tires. Just that they are built according to different marketing criteria.

The result of any comparative analysis depends on which tests you choose to employ. In Europe we care about fuel economy wet handling and braking performance. Almost all comparative tests carried out in Europe tend to measure performance in these important areas.

We care a lot less about longevity, or kerbing damage.

But in China, it is the other way around. Kerbing damage is a big deal. A very big deal. Tire makers who come to China discover very quickly that their elegant, slender sidewalls simply do not stand up to the punishment handed out by drivers there.

European tires are low in mass, but that makes them vulnerable to this kind of damage. So even the top premium brands fitted as OE to cars sold in China had a major quality control issue with blistering sidewalls and damaged plies until the specifications were changed and tire makers added an extra ply for protection.

Buyers of premium cars in China find that they have to replace their OE tires after around 20,000 km. They get upset about that. Chinese-branded tires last far longer.

There is no culture of testing tires for wet grip in China. There are so many two-wheelers coming at them from all angles that all drivers seem to have super-sense all-round vision. As a result of this, congestion and other factors, speeds tend to be lower.

Let me switch the situation around and propose a test in China of European premium branded tires aimed at the European market and a couple of China-branded tires aimed at the European market against a leading product from one of the much-derided Chinese brand names.

I propose that we test for cleat damage; for kerbing damage and for wear resistance. And nothing else.

I think most of us can, by now, predict the result.

The EU premium tires would be rated as "Not Recommended", or even "dangerous", while the Chinese brand would come out far ahead.

There is a Chinese saying which translates roughly as, "if something exists, then there is a market for it somewhere."

The reason most Chinese tires perform badly in tests that measure European-style parameters is that they are not designed to meet those criteria. Simple as that.

There's a reason for that, too.

I noted above that there are a few hundred tire makers in China. There is also a market in Europe and elsewhere for cheap tires. Importers in the developed world know about that market and they know they can source tires from China which can meet the demand.

Because many of the smaller Chinese tire makers don't really understand marketing, they are content to out-source the branding, pricing and distribution decision to the importer. The only customer feedback they get is to reduce the price even further. No-one tells them that they need to improve wet grip and fuel economy.

Without that impetus, they tend to respond to the demands to cut price. That usually has the effect of compromising technical performance parameters, such as wet grip, handling, and rolling resistance.

Is it any surprise that these products perform poorly in tests against the world's best tires?

Looking at the tire industry from another point of view, it takes even the top premium-branded tire makers years to understand how to make tires for the Chinese market. They have more or less learned how to do that in the car segment, but still today Chinese brands continue to dominate the truck tire sector. Because the premium brands can't profitably deliver the right products at the right price.

So perhaps we should not be surprised when Chinese tire makers take a while to learn about the different market conditions here in Europe or in North America.

So what can be done?

It's true that there are significant drawbacks in some Chinese tire factories. I can go into those in great detail, but this is not the place for that.

China's tire makers need to get more involved in the marketing and distribution of their products. They need to improve their understanding of their customers and then translate that understanding into products which the market wants.

There needs to be a change in management attitudes toward risk; personnel management and problem solving.

There are no short-term solutions. Introducing a 'Green tire strategy' as China did earlier this year will not do much, except increase the gap between the Western transplants and the local manufacturers. That gap is already huge and will only get bigger.

Chinese tire factories operated by international companies such as Maxxis / Cheng Shin; GT Radial and the main premium brands are good factories. Often they deliver better quality than their western counterparts.

Chinese management, with a few notable exceptions, is weak; risk-averse; lacks understanding of the real problems facing the business; and has poor human resources management skills.

It will take a lot before the Chinese car tire industry can compete with the westerners. There are a few Chinese companies doing well in the West. But those have direct access to good information about their target markets and customers. They are also more ready to invest in people, technology and products than the average car tire maker in China.