Manufacturing News

Cooper Tire aims to achieve double-digit revenue growth in China

U.S. replacement tire maker Cooper Tire & Rubber Co. is aiming to maintain the double-digit revenue growth of its operations in China in the years to come, according to Allen Tsaur, Cooper Tires' vice president and general manager of Asia operations.

"Our revenue in China last year was close to 5 billion ($732.1 million) and the China operations are now contributing a significant portion of Cooper Tires' global revenue," Tsaur said in an interview with Automotive News China in late July.

Cooper Tire runs two joint venture tire plants in China -- one in Shandong province with domestic Chinese tire maker Chengshan Group Co. and the other in Jiangsu province with Taiwanese Kenda Rubber Co.

The Shandong plant produces truck and passenger tires for the domestic market as well as the export market. The Jiangsu plant produces passenger tires for the U.S. market. 

After being negatively affected by the market downturn in late 2008, Cooper Tires' sales in China have recovered since March this year.

"Starting in April, our tire supply has been fallen short of demand," Tsaur said.

In the first half of this year, auto production and sales in China reached a respective 6.0 million units and 6.1 million units, up 15.2 percent and 17.7 percent, according to the China Association of Automobile Manufacturers (CAAM).

Given the 4 trillion yuan ($585.7 billion) fiscal stimulus package launched by the Chinese government in late 2008, Tsaur expects China's auto sales to remain strong for the rest of this year.

In spite of strong market growth, Tsaur said Cooper Tire has no immediate plans to build new capacity in China.

China's tire market still faces some uncertainties, he notes.

"Next year, the auto market here will need the support of the global market for growth," he said.

Also, the petition filed in June by America's United Steel Workers (USW) labor union, seeking to limit tire imports from China under Section 421 of the U.S. Trade Act, has added the uncertainties surrounding the tire market here, he added.

This year, Cooper Tire is striving to meet strong market demand for its tires in China by boosting the productivity of it Shandong plant.

Tsaur says: "Thanks to the Six Sigma and LEAN projects we implemented in November, December and January, the productivity of our plants has increased by a big margin."

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