The Chinese Automobile Tire Market:

China's automobile sector has grown quickly since its accession to the WTO. From
2009 through 2020, China was the world's largest vehicle manufacturer and distributor.
Meanwhile, China is the world's leading manufacturer and exporter of automotive tyres.

Car tyre demand may be divided into two categories: OEM demand from whole-vehicle
manufacture and replacement demand from the automobile aftermarket. Due to
significant market saturation, there is little room for growth in new automotive sales in
developed countries. As a result, aftermarket demand becomes the primary driving
factor in the tyre sector.

The researcher identifies two elements that drive the Chinese vehicle tyre industry: local
demand and export demand. On the one hand, both the production volume and the
reserve volume of vehicles in China continue to rise.

Automobile tire manufacturing output reached 25.72 million in 2019, reflecting a 6.4
percent CAGR from 2009 to 2019. The volume of automotive reserves topped 1.9
million in 2019, indicating a 15% CAGR from 2012 to 2016. These two statistics were
much higher than the worldwide average.

On the other hand, the significant cost advantage of Chinese tyres over foreign
competitors is associated with an increase in Chinese tyre exports. In 2016, the total
volume of Chinese automotive tyres exported was 3.31 million, with a total value of USD
11.46 billion. Continuous expansion in Chinese tyre exports have resulted in massive
international trade hurdles for Chinese tyre export firms. However, the cost advantage
of Chinese tyres makes it possible to sustain a high level of export volume in a short
period of time.

Biggest companies in the chinese tyre market:

Zhongce Rubber Group Co., Ltd. , Giti Tire, Sailun Jinyu Group Co., Ltd, Shandong Ling
long Tire Co., Ltd., Doublestar Group Co., Ltd., Xing yuan Tire Group Co., Ltd., &
Double Coin Holdings Ltd.

HOFSTEDE INSIGHTS:

POWER DISTANCE:

Power distance is defined as the extent to which less powerful members of a country's
institutions and organisations expect and tolerate unequal power distribution.

At 80, China is among the top PDI scores, indicating a society that accepts inequities
among individuals. The subordinate-superior relationship is polarised, and there is no
protection against superiors abusing authority. Individuals are impacted by official
authority and consequences, and they are often enthusiastic about people's ability to
lead and take initiative. People should not have ambitions that exceed their station.
sustain a high level of export volume in a short period of time.
What this means for the GoMiles franchise is that it would be difficult to replicate the
family-like-employee relationship that could be easily replicated in one of the original
states like India. This is due to the huge power distance gap in China among the
organisation.

INDIVIDUALISM:

This dimension's fundamental concern is the degree of interconnectedness that a

society maintains among its members. It has to do with whether people describe their
self-image in terms of "I" or "We." Individualist civilizations expect people to look after
themselves and their immediate family solely. People in Collectivist societies belong to
'in groups' that look after them in exchange for allegiance.

China, with a score of 20, is a strongly collectivist society in which individuals operate in
the interests of the collective rather than necessarily in their own. Hiring and promotions
are influenced by in-group considerations, with tighter in-groups (such as family)
receiving preferential treatment. Employee commitment to the organisation (but not
necessarily to the people who work there) is low. Relationships with coworkers are
cooperative for in-groups but frigid, if not hostile, for out-groups. Personal relationships
trump tasks and corporations.

What this means for the GoMiles tyre franchise is that there would a major cultural and
work environment shift, where local employee commitment to the organization is low.

MASCULINITY:

A high score (Masculine) on this dimension suggests that competition, accomplishment,

and success will drive society, with success defined by the winner / best in field - a
value system that begins in school and continues throughout organisational life.
A low score (Feminine) on the dimension indicates that caring for others and quality of
life are the prevailing values in society. A Feminine culture is one in which quality of
living is regarded as a measure of achievement and sticking out from the herd is
frowned upon. The primary question here is whether people are motivated by a desire
to be the best (masculine) or by a desire to enjoy what they do (Feminine).

At 66, China is a Masculine society–successful and motivated. The fact that many
Chinese will sacrifice family and leisure values to work exemplifies the necessity to
secure success. Service workers (such as hairdressers) will work till extremely late at
night. Leisure time isn't all that vital. Farmers who migrate will leave their family behind
in remote locations in order to find better job and money in cities.

What this means for the GoMiles tyre franchise is that the company can expect full
commitment from their employees in terms of the goals set and overtime and extra
effort will not be neglected.

UNCERTAINTY AVOIDANCE:

The dimension Uncertainty Avoidance is concerned with how a society deals with the
reality that the future cannot be predicted: should we strive to control it or just let it
happen? This uncertainty causes anxiety, and different cultures have learned to deal
with it in different ways. The degree to which individuals of a culture are threatened by
ambiguous or unclear events and have developed ideas and institutions to avoid them
is represented in the Uncertainty Avoidance score.

China has a low Uncertainty Avoidance score of 30. Though truth is relative, there is
concern for Truth with a capital T in the immediate social circles, and norms (though not
necessarily laws) exist. Nonetheless, obedience to laws and norms can be flexible to
meet the needs of the circumstance, and pragmatism is a part of life. The Chinese are
at ease with ambiguity; the Chinese language is full of confusing connotations that
Westerners may find difficult to grasp. Chinese people are adaptive and enterprising. At
the time of writing, the bulk of Chinese enterprises (70-80%) are small to medium-sized
and family-owned.
What this means for the GoMiles tyre franchise is that the company must be prepared
for uncertainty and quick transitions.

LONG-TERM ORIENTATION:
This dimension illustrates how every civilization must keep some ties to its own history
while dealing with present and future concerns, and how cultures prioritise these two
existential aims differently. Low-scoring normative cultures, for example, seek to uphold
time-honored traditions and norms while viewing societal change with scepticism. Those
with a high-scoring culture, on the other hand, adopt a more realistic approach: they
advocate prudence and investment in contemporary education as a means of preparing
for the future.

China ranks 87th in this area, indicating that it is a pragmatic culture. People in
pragmatic civilizations think that truth is highly dependent on circumstance, context, and
time. They demonstrate a capacity to readily adjust traditions to changing
circumstances, a strong proclivity to save and invest, thriftiness, and tenacity in
accomplishing achievements.

INDULGENCE:

This dimension is characterised as the amount to which people attempt to regulate their
urges and impulses as a result of their upbringing. Control that is comparatively poor is
referred to as "indulgence," while control that is relatively strong is referred to as
"restraint." As a result, cultures might be classified as Indulgent or Restrained.
As seen by its low score of 24 in this area, China is a Restrained society. Societies with
a low score in this category tend to be cynical and pessimistic. Furthermore, in contrast
to Indulgent civilizations, Restrained societies place less importance on leisure time and
exercise greater control over the satisfying of their wishes. People with this mindset
believe that their behaviours are constrained by societal standards and that indulging
themselves is bad.
BIBLIOGRAPHY:

https://www.globenewswire.com/en/news-release/2021/02/09/2171889/28124/en/China-
Automobile-Tire-Industry-Report-2021.html

https://www.hofstede-insights.com/country-comparison/china/