Since the beginning of spring 2026, China’s tire industry has been experiencing an unprecedented existential crisis.
“Producing 100 million units and losing 100 million units” is no longer an exaggerated industry warning, but a true portrayal of many passenger car tire factories.
In the field of commercial vehicle tires (all-steel tires), it has long been an open secret to “sell even if you lose money”. This “bloody” survival has not only reshaped the domestic market structure, but also ignited the war of low-price competition to the world.
The collective blood loss in the all-steel tire market is serious.
The domestic all-steel tire market has been in a low-profit state for a long time, but in order to maintain operating rates and market share, some companies even sell at prices lower than cost prices.
This vicious competition directly led to the accelerated withdrawal of international brands – Bridgestone closed its last all-steel tire factory in China in 2024, Dunlop moved its production base, and other foreign giants also made it clear that they “will no longer participate in China’s all-steel tire price war.”
The scope of the price war continues to expand.
Passenger car tires were once regarded as a “safe haven” due to their high brand concentration and strong consumer attributes. However, in recent years, the price war of e-commerce platforms has completely broken this pattern.
During the “Double 11” period in 2025, a “floor price” of 99 yuan for 16-inch passenger tires appeared on an e-commerce platform, which was half the price in 2020.
The financial reports of leading companies show that the gross profit margin of passenger car tires will drop by 4.2 percentage points year-on-year in 2025, and the profit of a single tire of some companies is less than 5 yuan.
What is even more worrying is that the price war has spread to the field of engineering machinery tires, two-wheel tires and even industrial tires. In the first quarter of 2026, the ex-factory price of motorcycle tires fell by 18% year-on-year, the largest decline in history.
Overseas production capacity has also triggered a global low-price competition.
In order to circumvent trade barriers and reduce costs, Chinese tire companies have expanded wildly in Southeast Asia in the past five years.
Chinese tire factories in Thailand, Cambodia, Vietnam and other places have formed an annual production capacity of more than 200 million units, equivalent to 35% of the total domestic production capacity.
These overseas factories are copying the domestic price competition model. The average price of PCR tires exported to Europe in 2025 will drop by 9.3% year-on-year, triggering an EU trade remedy investigation.
Industry experts warn that if disorderly expansion is not controlled, Chinese tires may repeat the mistakes of the photovoltaic and steel industries and face global anti-dumping sanctions.
Facing the pressure of losses across the industry, some companies have begun to seek transformation.
Zhongce Rubber invested 1.2 billion yuan to build an intelligent production line, reducing unit energy consumption by 18%; Linglong Tire increased investment in research and development, increasing the proportion of special tires for new energy vehicles to 35%.
Data from the China Rubber Industry Association shows that the industry’s R&D investment intensity has increased from 1.8% in 2020 to 3.2% in 2025. However, under the squeeze of the price war, most small and medium-sized enterprises are still unable to bear the cost of transformation.
This price involution sweeping the entire industry is essentially the contradiction between excess low-end production capacity and insufficient high-end competitiveness.
When “making 100 million units and losing 100 million units” becomes the norm, China’s tire industry urgently needs to shift from “scale expansion” to “value competition.”
In the critical period of restructuring the global industrial chain, how to break the dependence on low prices and build core technical barriers will determine whether Chinese tires can truly move towards the mid-to-high end of the global value chain.
