On August 28, the Tire Business released its 2015 Top 75 Global Tire list, which traditionally ranks companies by their sales related to tire manufacturing in 2014.

The global tire market in the past two years after the "lag" into the decline channel, sales down 3.8%; Revenue and net profit rose, but the gains narrowed. Global enterprise rankings change little, tire mergers occur less. Investment in tire projects declined after years of growth, and there is a trend to shift to Asia. Rubber and crude oil prices are at historic lows, and the selling price of tires is declining. Forecast 2015 world tire sales continue to decline 6% ~ 8%. Most tyre-makers are downplaying sales in an effort to boost operating profits.

Bridgestone won for another seven years

The most notable feature of this year's ranking is that there is little change in the ranking. The top 17 is almost a copy of last year's ranking, and the 18th is a change, that is, Nexen of Korea rose to 18th from 22nd last year.

Bridgestone's $26.045 billion in sales led the world for the seventh year in a row, thanks to its stake in Turkey's Sabach Tire (43 percent) and Finland's Nokia Tire (19 percent). Michelin was No. 2 with $24.668.5 million and Goodyear was No. 3 with $16.355 billion. Fourth place remained with continental Germany, with sales of $11.875 billion, further narrowing the gap with the top three. The four companies have become members of the "$10 billion club" of tire sales.

Italy's Pirelli came in fifth, Japan's Sumitomo came in sixth, Hankook Tire came in seventh, and Japan's Yuke Haoma came in eighth. Chinese tire companies ranked 9th and 10th, with Zhengxin International at No. 9 with $4.441 billion. Zhongce Rubber Group ranked 10th with sales of $4.118 billion. Giti Tire of Singapore, Cooper Tire of the United States, Kumho of South Korea and Toyo of Japan ranked 11th, 12th, 13th and 14th respectively. China Triangle Group, India MRF, Apollo Tire, South Korea Nexen, Finland Nokia and China Linglong Tire ranked 15th, 16th, 17th, 18th, 19th and 20th respectively.

In the top 75 ranking, the Chinese mainland enterprises accounted for 29, 5 enterprises of Taiwan, 10, India America five, four in Japan, South Korea 3, 2 Italy, Russia three, two, Turkey, Indonesia, Thailand, Germany, Finland, Singapore, Argentina, belarus, the Czech republic, France, Iran, Canada and Vietnam have one each.

There are 6 new faces participating in the ranking, namely China's Shandong No.1, Pulin Chengshan, Weifang Yuelong, Yellow Sea Tire, Canada's Camso company, Russia's Altai Tire Industry.

The companies that dropped out of the top 75 list included China's Shandong Derebao, Shandong Jinyu, Xinjiang Kunlun, Tianjin United Tire, Indonesia's Gitong, and the Netherlands' Magna Tire Group.

Tyre sales fell into the mainstream

In 2014, the global tire industry sales volume was 179.9 billion dollars, down 3.8%, which is the third consecutive year of decline since the beginning of the new century, and the decline trend is expanding, indicating that the world tire industry sales volume has entered a declining channel.

Among the top 75, 50 companies reported a decline in sales, while 17 companies reported an increase. Nine of the top 10 companies reported a decline in sales, and 17 of the top 20 companies reported a decline in sales, leading to a decline in sales.

Combined sales of Bridgestone, Michelin and Goodyear fell 4.9% from the previous year and accounted for 37.2% of global tire sales, down another 0.5 percentage point on the 1.7 percentage point decline in the previous year. The industry concentration of the top 10 was 63 percent, unchanged from the previous year, with industry concentration leveling off after years of decline.

The year 2014 is a year with few mergers and reorganizations in the tire industry, which has little impact on the top 75 tire rankings in 2015. But the 2016 ranking will be highlighted by the acquisition of Italy's Pirelli by China National Chemical Corporation. Under the agreement, ChemChina will form a new company with Pirelli, and ChemChina will eventually become Pirelli's largest controlling shareholder. Once the deal is completed, Pirelli will be the biggest acquisition since 2012. This will have a great impact on the world tire rankings in the future, China National Chemical Group and Pirelli newly established tire companies are expected to enter the top 15.

Sales of 23 companies fell more than 10 percent. Sales growth in more than 10% of enterprises only 6, are the China weifang Yuelong, the China Sailun Jinyu, the United States CTP Transportation Products Company, Shandong Zhongi, China Shandong Bayi, Sichuan Haida tire and the United States CTP transportation products companies, mainly concentrated in our country.

The number of members of the world tire "2 billion dollar club" is still 17, while the number of members of the "1 billion dollar club" has dropped from 33 to 27. The main reason for the decline in sales is the decline in rubber and other raw material prices led to low tire prices, resulting in negative growth in tire company sales. 2015 tire prices are still down, 2015 tire sales are expected to fall in the range of 6% ~ 8%.

Economic performance is still improving

In 2014, the global top 75 tire operating profit and net profit still maintained growth, most of them hit record highs, but the growth rate has narrowed.

Among the 20 companies that reported profits, three reported a decline in operating profit, and only one, Titan, reported a loss. The average operating profit margin fell to 12.3% from 12.5% last year. Nokia Tyre has the highest operating margin of 22.2 per cent.

Five of the 20 companies reported a decline in net profit. The average net profit margin of the industry was 7.4 percent, up 2.52 percentage points over the previous year. Nokia TIRE ranked FIRST WITH 18.8 PERCENT net profit MARGIN, WHILE Goodyear and POSITIVE SUN INTERNATIONAL MAINTAINED DOUBLE-DIGIT net profit margin GROWTH, compared WITH SEVEN COMPANIES WITH DOUBLE-DIGIT GROWTH IN THE previous year.

Most of the companies' net profits increased from the previous year. Among them, three companies saw a big increase in net profits, the largest was Goodyear (307.5%), the second largest was Toyo Tire (169.4%), and the third largest was Gitong Tire (124.4%).

Sales per employee were $240,000, down from a year ago. Nokia ranked first with $431,835, followed by Nexen with $405,105, Cooper with $385,632, Toyo with $343,396 and Titan with $291,615.

The profit improvement was mainly due to low prices for raw materials such as rubber. Because of this, most tire companies are weakening tire sales and focusing on profit improvement. From the analysis of the first half of 2015, 2015 global tire industry operating profit and net profit further optimistic.

The investment slowdown is shifting to Asia

In recent years, investment in the world tire industry has been very exuberant and maintained stable growth, but in 2014, the tire investment slowed down for the first time. The Tire Business put the figure at $6 billion, below the 10-year average of $7 billion. Two thirds of the investment is in Asia, and project investment is shifting to Asia, especially to China and Thailand.

In the past year, there have been 12 new projects, adding at least 66 million semi-steel tires, 9 million load tires and 5 million other kinds of tires. In addition, major tire companies announced three plant closures: Apollo's Durban plant in South Africa, Michelin's Budapest plant in Hungary, and Joue-les-Tores in France.

In terms of investment quota, Japan's Yuke Haoma ranked first with $1 billion. It was followed by Goodyear at $635 million, Kenda Rubber at $5.0 million and Apollo at $425 million.

Tire investment accounted for an average of 7.2% of sales, down nearly 1 percentage point from the previous year. In terms of capital expenditure/sales revenue ratio, Nexen Tire ranks first with 14.9%, followed by JK Tire of India (13.3%) and Giti Tire of Indonesia (13.2%).

Bridgestone and Continental Germany ranked first and second in terms of budgeted capital expenditure in 2014, with $2.815 billion and $2.716 billion respectively, but the ratio of budgeted capital to sales was lower than the industry average.

In terms of R&D spending, Continental Germany and Bridgestone took the top two spots, with $2.828 billion and $288 million respectively. In terms of R&D expenses/sales, mainland Germany leads with 6.2 percent, followed by Michelin, Nexen and Pirelli with 3.4 percent. Of the 20 tire companies, 19 reported a year-over-year increase in R&D expenses to sales, while only one, Cooper, saw a decline. Companies with growth of more than 20 percent included Jeongsin Tire, Kumho Tire, Diitan and JK Tire of India. It shows that the world tire companies pay more attention to scientific research and development than before, which is worthy of reference and thinking of the Chinese tire industry.