Have tires that are “Made in China” finally arrived?
Darrin Bossence can recall a time when Japanese products were not considered the best on the market.
“Now, they’re one of the premium global manufacturers,” says Bossence, Vice President of Sales and Marketing at Dynamic Tire Corp. “It’s going to be the same story with Chinese manufacturing, as their tires.”
Although there may have been some quality issues with Chinese tires when they first came on the Canadian market 12 to 15 years ago, Bossence believes there are now excellent products. “People are buying them the second time around,” he notes. “And whether you look at PLT or the commercial side, they often have more market share than the majors.” Grudge purchase
Tires are known to be a grudge purchase, and price continues to play a significant role for consumers. “The Chinese can provide a better price because they have lower labour costs,” explains Bossence. “It’s a relatively green manufacturing process so in some cases, they may not have the additional cost of emissions and scrubbers on their smokestacks. Also, they don’t have as much money in R&D or marketing. And it’s a relatively low cost of transportation.”
Bossence says Dynamic sources out quality factories and quality brands and does much of the engineering in Canada. “Different markets require different tires and different performance,” he notes. “We have in-house engineering, so we help with product development, sizing, etc. for the Canadian market.” Many of the manufacturers that he deals with hire engineers, scientists and lab technicians from the majors.
There are, he says, a little too many tire factories in China. “There was a type of consolidation a few years ago, and we may be due for another round of that again,” Bossence notes.
Country of origin
That may be why Chinese tire manufacturers are pushing their products to markets outside of China, to the point where markets like the United States have imposed countervailing duties and anti-dumping duties. “The Canadian market is flooded with inexpensive Chinese tires due to the American duties,” notes Peter Gregory, President, Atlas Tire Wholesale.
However, many Tier 1 manufacturers have some sort of manufacturing footprint in China. “These tires are made to the specifications of the Tier 1 manufacturer,” says Gregory. “And the product specifications are verified by them. It may not have their name on it, but they own the brand.”
“We have to stop looking at country of origin.” — Darrin Bosence, Vice President, Sales & Marketing, Dynamic Tire Corp
That’s why Bossence believes it’s time to stop looking at “country of origin” when buying tires. “Even Michelin produces some of their Michelin brand in China now,” says Bossence.
He also believes that there will eventually be an elimination of the middle ground, or Tier 2, in the Canadian tire market. “People are either going premium or they’re going entry-level,” says Bossence.
“Tier 2 is going to shrink over the years and people who buy high-performance cars will still be buying Tier 1 tires. But for the average consumer who drives a van to and from work, maybe puts on 20,000 kilometres a year, the Chinese tire is more than enough.”