What are the entry barriers to the tire rubber industry?

The tire rubber industry, as the core part of tire manufacturing, has entry barriers mainly reflected in the following aspects:

1、 Policy barriers

Industrial policy restrictions: The state regulates the production scale, technical standards, and environmental requirements of the tire industry through industrial policies. For example, the "Tire Industry Industry Policy" issued by the Ministry of Industry and Information Technology sets admission conditions for the production scale of heavy-duty truck radial tires, light-duty truck radial tires, and sedan radial tires.

Compulsory certification system: Tire products need to be certified by a nationally designated certification body, such as the "CCC" certification of the China Quality Certification Center. Products that have not obtained a compulsory product certification certificate and have not applied the China Compulsory Certification mark are not allowed to leave the factory, import, or sell.

2、 Technical barriers

The production process is complex: the tire production process involves knowledge from multiple disciplines such as materials science, systems engineering, and dynamics, and requires a high level of craftsmanship.

Vulcanization technology and product formula: Vulcanization technology and product formula are the core technologies of tire manufacturing and constitute important technical barriers to enter the tire industry.

High performance tire research and development: With the development of the automotive industry, the market's demand for high-performance and multifunctional tires continues to increase, such as flat, anti-skid, low rolling resistance, and low-noise tires. This requires tire manufacturers to have high technical research and development capabilities.

3、 Financial and scale barriers

High demand for capital investment: The research and application of tire production technology involves multiple fields and requires significant capital investment.

Scale production requirements: Tire production enterprises can only clearly demonstrate their advantages in production efficiency, procurement costs, and management expenses after achieving scale production. Therefore, newly entered enterprises need to have large-scale production facilities, machinery and equipment, as well as supporting production management and quality control capabilities.

4、 Brand barriers

Brand awareness and competitiveness: The tire industry has strong brand attributes, and consumers are prone to forming inherent consumption concepts and habits towards tire brands. Newly entered enterprises need to invest a large amount of resources in brand building, brand promotion, and other aspects to open up market awareness and enhance brand competitiveness.

Brand premium capability: Excellent tire brands can gain consumer trust and recognition by leveraging their advantages in product performance, quality, and service, thereby achieving brand premium.

5、 Channel barriers

Long development cycle for supporting customers: The main supporting customers in the tire industry are automobile manufacturers and automotive component suppliers, who have strict selection criteria for tire suppliers and a long development cycle.

Sales channel construction: Tire companies need to establish a wide range of sales channels to cover the market, including distributors, retailers, e-commerce platforms, etc. New entrants need to invest a significant amount of resources in sales channel construction to quickly capture the market.

In summary, the entry barriers to the tire rubber industry mainly include policy barriers, technical barriers, funding and scale barriers, brand barriers, and channel barriers. These barriers together constitute a high threshold for the tire rubber industry, limiting the number and speed of new entrants.