Alert! Chinese Tire Investment is Stalling!

Looking at the overview of domestic tire factory investments, investments in radial passenger car tires and radial truck tires have essentially stalled in place this year.

Breaking down the newly added tire projects in China for 2026 by category, the structure is clear at a glance:New capacity for radial passenger car tires is approximately 46 million tires, and radial truck tires are approximately 5 million tires, engineering tires, giant tires, and aviation special tires total approximately 1.4 million tires; meanwhile newly added casings for passenger two-wheeler tires are approximately 173 million tires, various inner tubes total approximately 69 million tires—the two combined account for more than 80% of domestic new capacity. The increase in domestic capacity is basically just two-wheeler tires and inner tubes.

Domestic Demand Collapses, Production and Inventory Drop

August China's production of rubber tire casings was 103.458 million tires, a year-on-year decline of 0.3%. The average capacity utilization rate of tire factories in the first half of the year was 68.44%, a year-on-year decline of 4.84 percentage points; in the October order survey, 75% of the sampled enterprise new orders for radial truck tires decreased month-on-month, with no company showing growth.

New car sales are sluggish, the supporting market follows the cold. Latest data shows Q1-Q3 automotive market 'internally cold, externally hot':September passenger car sales were 2.588 million units, a year-on-year decline of 9.5%; domestic sales are more intuitive — September only had 1.904 million units, a year-on-year decline of 26%, January-September cumulative decline 22.4%.

Chen Shihua, Deputy Secretary-General of the China Association of Automobile Manufacturers, stated bluntly: "Currently, domestic sales are in a relatively depressed state, and it is expected to continue in this state in the coming months."

Export, the lifeline, is also getting heavier.August China's tire export volume was 61.33 million tires, a year-on-year decline of 2.7%, export value was approximately 13.804 billion yuan, a year-on-year decline of 4.5%, both volume and value declining; 50% of enterprises had export orders decrease month-on-month, with EU orders declining the most significantly.

The EU levied anti-dumping taxes on Chinese-made passenger car and light truck tires from 4.3% to 45.3% starting July 8 this year, anti-subsidy final ruling no later than December 5; the US started anti-dumping administrative review against Chinese tires on October 1, and the United Steelworkers applied for a global safeguard investigation under Section 201 in September — once filed, exports from overseas factories to the US will also be controlled.

Investment Bypasses Tariff Walls, Floods Overseas

Domestic construction has stopped, it's not that production expansion won't happen, but capacity is expanded overseas.

On October 7, Sentury announced a plan to jointly build an annual production 7 million high-performance passenger car and light truck radial tire project with Turkish TATKO Group, total investment 272.82 million USD, construction period 18 months, holding 90.1%.

In Egypt, Sailun Egypt base plans to invest approximately 1.7 billion USD (approx 11.5 billion yuan), in three phases, Phase 1 putting into operation this year; Linglong Egypt 6 million sets of radial passenger car tire project investment 270 million USD, another Linglong Group and Egyptian side signed memorandum of 2 billion USD industrial park; Fengshen Egypt capacity expansion project 2.681 billion yuan; Chaoyang Langma Egypt base already broke ground.

In Morocco, Sentury 12 million sets of radial passenger car factory is already producing at ramp-up, Guizhou Tire 300 million USD passenger car project completed foreign investment filing, Yongsheng Rubber approx 700 million USD industrial park started construction in January this year.

In Southeast Asia, Triangle Cambodia 7 million sets project is in approval, Pullman Chengshan Malaysia Kedah base under construction.

In Mexico, Sailun passenger car factory is already mass supplying North America; in Russia, Hai'an Rubber 4.319 billion yuan giant tire project approved.

Upstream materials also catching up — Daye Industries Morocco steel cord, Jiangsu Xingda Thailand Phase II, Link-Tech and Zhongtian Steel Egypt supporting projects, material end going overseas has caught up with OEMs.

According to China Rubber Industry Association data,As of 2025, Chinese tire enterprises' overseas bases have achieved radial passenger car tire capacity 168 million tires, planned total capacity after full production 353 million tires; the logic of going overseas, has also shifted from 'Southeast Asia large production, global large sales', to'Near-shore large production, Regional large delivery'.

Domestic Investment Concentrated in These Three Categories

Stalled are major categories, not all projects. Domestic increases concentrate in three places:

Engineering Tires and Giant Tires, Pullman Chengshan Rongcheng Factory investment 1.17 billion yuan, first 30.00R51 giant tire has rolled off the line, Fengshen Jiaozuo 20,000 sets giant engineering radial tires under construction;

Aviation and Special Tires, Huangpu Tire Inner Mongolia base approx 1.2 billion yuan, first tire rolled off line on September 28, Gubo (Shandong) 1.5 billion yuan total 700,000 sets project environmental impact assessment approved;

Two-Wheeler Tires, Tengsen Rubber Weihai 12 million sets motorcycle tire project over 2.7 billion yuan, equipment entering debugging.

In major categories, the only new projects still advancing are Sailun Qingdao Dongjiakou 12.6 million sets radial passenger car tires (2.342 billion yuan, 2026 Q4 launch) and Fumas Shouguang 12 million sets radial passenger car tires (1.571 billion yuan), the latter is still in EIA public notice.

At this end of two-wheeler tires, only comparing by capacity investment scale,Hebei this year approx 100 million tires, about 70% higher than Shandong, Shandong less than 60 million tires — for the first time in twenty years, the center of tire capacity investment has shifted from Shandong to Hebei, and Hebei's 100 million tires are almost exclusively two-wheeler tires; two-wheeler tire ex-factory price drop is close to 20%, this year tire manufacturing cost at least rose 30%.

Conclusion

Connecting these matters together, the logic of tire investment this year boils down to one sentence: Cars aren't selling, tires aren't selling, exports are blocked, so money bypasses the tariff wall and builds directly inside the wall.

But bypassing tariffs doesn't bypass competition — the more frantic the queue, the more awkward the tide receding;The next round of comparison is no longer who builds faster, but who turns capacity into profit faster.