Wang Feng: Only Based on “Quality” Can Tire Industry Develop for Long

In the long run, the development of tire industry must be based on “quality”.

AEOLUS Tyre’s strategic adjustment has shifted from focusing on the development of “quantity” to focusing on the improvement of “quality”. The strategic positioning is to be a leader in the “quality” of Chinese tires and become a professional company with world-class influence. Around this positioning, AEOLUS has carried out five strategic layouts, namely “World AEOLUS, Tech AEOLUS, Digital AEOLUS, Green AEOLUS and Humanistic AEOLUS”.

In terms of daily operation, AEOLUS will fully benchmark world-class enterprises, introduce world-class best practice experience, focus on quality improvement, and hit the limits of cost control to continuously improve the overall operating efficiency of the enterprise. At the same time, AEOLUS reorganized the brand based on the specific conditions of two bases, and put forward clear brand strategy, product strategy, channel strategy and ser-vice strategy.

Chinese tire enterprises cannot be limited to domestic perspectives. From the perspective of truck and bus tire production capacity distribution, it is seriously surplus in Asia-Pacific region, relatively self-sufficient in South America, and need for imports in North America, Europe and Africa. From the perspective of sustainable development of the industry, the domestic tire industry still has a serious overcapacity. Although many enterprises have deployed overseas production capacity, there is still no way out of trade friction risk as the United States launched anti-dumping investigations against Thailand, Vietnam and other countries and regions in May.

It is hoped that the association could play a bridge role in solving the problem of overcapacity in tire industry, and actively communicate with relevant national ministries and commissions to introduce industrial policies, which can learn from the practices of automobile industry. The policies introduced by auto industry in addressing overcapacity and layout are more effective in practice. Enterprises capable of development digest and reorganize existing excess production capacity, and then rearrange new production capacity and continue to develop. Social resources can be saved, which benefits the country and the people.

From a micro perspective, each tire enterprise has different production and management concepts. A few years ago, the country proposed to take a road of new industrialization, which should be “two types”, “two -tions” and quality benefit type. Hereinto, “two types” are resource-saving type and environment friendly type; “two -tions” are informatization and industrialization, and digitalization shall be added now as upgrading; and the quality benefit type is to have good business performance to ensure shareholder satisfaction and employee satisfaction.

The most noteworthy is the international development of Chinese tire enterprises. In addition to broader strategic thinking, if you want to become a better and international first-class enterprise that is unwilling to be mediocre, you need to benchmark and see what the outstanding enterprises in the industry are doing at present. Combined with AE-OLUS’s practice, it mainly focuses on the transformation of two modes.

The first is the transformation of organizational mode, that is, the transformation from traditional mode where resources concentrate in one place to the mode of global multi-base regional layout, a localized international talent system is synchronously built, and a global IT support system is established to achieve digital transformation and support business development. The second is the transformation of business mode. From the perspective of business mode, the average selling price of Chinese tire enterprise is far from that of world-class enterprise. If this mode is not changed, even if the product quality improves, the price will still not rise. This requires more attention to brand and channel building, and breakthroughs through innovative combinations of brands and products. This is also a huge challenge China’s tire industry are facing.

The concept of sustainable development must be consistently implemented to support China’s development towards a powerful country in tire.