In the first half of this year, the domestic tire industry showed a trend of both scale expansion and profit pressure.
Data show that the 10 listed companies in the tire sector of the A-share market achieved a total operating income of more than 77 billion yuan in the first half of the year, a year-on-year increase of more than 50%.
Among them, Zhongce Rubber leads the way with revenue of 21.855 billion yuan. The company’s overseas revenue accounts for nearly 50%, and its global layout has achieved remarkable results.
However, in sharp contrast to revenue growth, the total net profit attributable to shareholders of listed companies in the first half of the above 10 companies fell by more than 100% year-on-year.
Among them, Qingdao Double Star lost 186 million yuan.
Against the background of steady recovery in industry demand and continued expansion of production and sales scale, the contradiction between increasing revenue and not increasing profits is highlighted.
At the same time, sharp fluctuations in the prices of core raw materials such as natural rubber have also become a key factor dragging down corporate profits.
Multiple factors support revenue growth
Judging from the operating data of the above 10 companies, revenue growth in the first half of the year mainly relies on two core engines: the deepening of global production capacity layout and the breakthrough in the new energy vehicle supporting market.
Specifically, leading tire companies have effectively circumvented trade barriers and achieved flexible allocation of orders by building factories overseas.
For example, Zhongce Rubber’s production bases in Thailand and Indonesia contributed nearly 4 billion yuan in revenue in the first half of the year. The company’s base in Indonesia served as a fulcrum for new production capacity and achieved a net profit of 20.6764 million yuan in the first year of production, becoming an important driver of the company’s overseas revenue growth.
Linglong Tire’s European factories and Sailun Tire’s Vietnam factories also maintained full production, effectively hedging the impact of changes in tariff policies in the European and American markets.
The explosive growth of the new energy vehicle supporting market has opened up a second growth curve for tire companies.
In the first half of this year, China’s new energy vehicle production increased by 41.4% year-on-year, and listed tire companies accelerated the development of adapted products and supporting cooperation.
Among them, Zhongce Rubber has successfully entered Toyota’s supply chain and provided original tires for the Platinum 3X model. At the same time, the company has also received orders for BYD’s Formula Leopard Titanium 3, Xpeng MONA and other new energy models; Linglong Tire has successfully provided supporting tires for many new models such as Geely Xingyuan, Nissan N7, Wuling Xiangjing, Leapmoon B10, etc., achieving rapid penetration from economical models to mid-to-high-end, and from traditional car companies to new car-making forces.
At the same time, the deep development of channels in the domestic replacement market has also provided support for the revenue growth of tire companies.
For example, in the domestic replacement market, Qingdao Double Star abandoned the idea of being a traditional big customer and launched a “one location, multiple households” strategy, initially achieving full coverage of the domestic core city network; Guizhou Tire actively develops group users such as ports and mines who have a large demand for replacement tires, and effectively reduces customers’ tire usage costs with its excellent performance.
Intensified cost pressure
Despite the continued expansion of revenue scale, the profit performance of listed tire companies in the first half of the year was not satisfactory.
Judging from the data, the above-mentioned 10 companies all experienced varying degrees of profit decline, and Qingdao Double Star even fell into losses.
Through in-depth analysis, it is not difficult to find that the sharp increase in raw material prices and the imbalance of cost structure are the core reasons for increasing revenue but not increasing profits.
In the first half of the year, the dramatic fluctuations in natural rubber prices had a serious impact on the cost control of tire companies.
As the core raw material for tire production, natural rubber accounts for more than 30% of its production costs.
“In the first half of 2025, affected by factors such as dry weather in the main producing areas of Southeast Asia and international capital speculation, the spot price of natural rubber rose sharply. The year-on-year increase in raw material costs caused the gross profit margin of listed tire companies to decline. In addition to natural rubber, the prices of raw materials such as synthetic rubber and carbon black also increased to a certain extent, further exacerbating the cost pressure on tire companies.” Relevant sources said.
At the same time, cost structure imbalances and expense control have become more difficult, further squeezing profit margins.
From the perspective of cost structure, the growth rate of operating costs of listed tire companies in the first half of the year was significantly higher than the growth rate of operating income.
On the one hand, although building factories overseas avoids trade risks, the initial investment in equipment, labor costs and logistics costs are relatively high; on the other hand, in order to expand new energy supporting facilities and overseas markets, many companies have increased their R&D investment and sales expenses.
In addition, the problem of structural overcapacity in the domestic tire industry still exists. The homogenization competition of low-end products is fierce. Some companies have to adopt price reduction strategies in order to maintain market share, further compressing profit margins.
It is expected that as Southeast Asia’s natural rubber enters the peak tapping season in the second half of the year, raw material prices are expected to gradually fall. Some tire companies have also stabilized procurement costs by signing long-term agreements and establishing strategic reserves.
At the same time, the continued increase in the volume of high value-added products such as smart tires and the increase in overseas production capacity utilization may improve corporate profitability.
“But in the short term, tire companies still need to face the dual challenges of cost pressure and market competition. How to optimize product structure through technological innovation and control costs through refined management will become the key for companies to break through the dilemma of increasing revenue without increasing profits.”
