Industry News

Giti Suspends Production at Chonqing Plant

Chongqing, China: Giti Tire Group has suspended the production at its Chongqing tyre plant which was well known for the production of radial truck tyres. The company is also laying off 1000 employees at its 57-year old Chongqing plant. Though the Giti officials are calling it as a strategic step taken by the company but according to industry report, environmental issues are the core reason behind this decision taken by the company. The company has also termed it as a step towards transformation according to the current situation of China’s economic condition.

The plant which was earlier known as Chongqing Zhongce Tire Co. prior to acquisition by Giti, still have 100 staffs on duty, according to plant’s vice general manager Li Jianlong.

Giti has seven tyre plants including the Chongqing plant. The company is building one at South Carolina and is also minority shareholder in P.T. Gajah Tunggal Indonesia. The company has an employee strength of approximately 30000.

TechSci Research believes that with the closure of Chongqing Tyre plant, the production as well as market share of Giti in radial truck tyre segment is anticipated to decline. The company needs a detailed transformation plan at this stage to maintain its position in the market.

The recent report published by TechSci Research, “China Tyre Market Forecast & Opportunities, 2020”, depicts rising automobile production/sales, particularly passenger cars and electric two-wheelers; as well as high vehicle fleet size, which is amongst the highest in the world are the key factors driving China tyre market during 2010-2014. China’s vehicle production in 2014 was in excess of 60 million units. The country surpassed the United States in the last decade. The country emerged as the largest automobile market and has sustained its supremacy since then.

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