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Spring in the tire industry?

The repeated epidemic is undoubtedly a catalyst for the rapid reshuffle of the tire industry, which will accelerate the elimination of some inherently unhealthy and abnormal tire enterprises.
In the tire industry shuffling process, which tire dealers will be eliminated first?

In view of the problem of “tire dealers to be eliminated”, Tire International perspective to a number of tire industry veterans to consult, they believe that the following behavior of tire dealers will be eliminated first.

“High loan” type tire dealer

The tire industry relies heavily on capital. In the past few years, the overall gross profit and turnover rate of tire dealers are relatively fast. In this context, tire dealers will choose bank loans to solve the capital problem in order to achieve rapid development.

Bank loan is a double-edged sword. If used well, it will call for the wind and rain. If not used well, the family will be ruined.

However, the current epidemic, China’s economy has undergone great changes, and the tire industry has been greatly affected. In this change, some tire dealers still continue the old way, the bank loan ratio is still high, and even form the phenomenon of relying on bank loan.

Tire gross profit reduced, affected by the epidemic cost increases, now if the tire industry is too dependent on loans, tire gross profit is not enough to repay the bank loan interest.

Faced with this situation, tyre dealers who rely too much on bank loans will be the first to go.

“Extensive” type tyre dealer

“Standing on the tuyere, pig can fly”, now a lot of the success of the tire dealers are originated from standing under the dividend of China’s rapid economic growth, therefore, lead to a lot of tire dealers burgeons too rapidly, which leads to the formation of a tire dealer “extensive” management model, mainly in accounts receivable and extensive, enters sells saves the extensive, extensive and professional team and extensive.

Post time: Oct-08-2022