Panama’s importance to global commerce cannot be overstated. It is a free-trade zone to Central and South America, with billions of dollars of products traveling through the Panama Canal every year.
That is why Gus Lima calls his Latin American & Caribbean Tyre Expo in Panama a “show and sell” event for suppliers and distributors.
Lima, CEO of Latin Expo Group LLC, says the sixth annual exposition lived up to his expectations. The show featured 210 exhibitors from around the world; Chinese tire companies dominated the two floors of booth space.
“This show’s purpose is to bring together manufacturers and distributors from all over the world into the backyard of the Latin American market,” says Lima. “They can meet many tire dealers in Panama who, due to tightening U.S. travel regulations, are not able to get a visa to go to the United States to visit the shows. And Panama has been a business hub for Latin America for the last 40 or 50 years.”
Double Coin Holdings LLC and its American subsidiary, Chinese Manufacturers Alliance LLC (CMA), shared a booth with Miami, Fla.-based Lucy’s Tire Inc.
“We recognize that the Latin American & Caribbean Tyre Expo brings an increasing number of global manufacturers and suppliers to this region each year,” says Aaron Murphy, CMA’s vice president. “The Expo affords us and our partner, Lucy’s Tire, an opportunity to maintain and develop our strategic relationships within the Latin American and Caribbean markets.”
Attendance alone does not ensure success, according to Lima. “Any show’s success depends on attracting qualified visitors, not just people roaming around trying to pick up a free pen or a cap.
“We don’t let anybody in the door who is not vetted as a tire dealer or people who want to get into the tire business. And we don’t charge anybody to come into the show.
“The show is a go-to show right now for Latin American tire dealers and for many companies that want to access that market. We’ve been lucky that the show has been successful, successful enough for some corporations to make this their yearly corporate event. (Our) show is here to stay.”
Lima says the Latin American & Caribbean Tyre Expo and the inaugural North American Tire & Retread Expo, held earlier this year in New Orleans, are separate entities.
“They are for different audiences. The audience at the North American Expo is strictly what the title says; that show is geared to the tire business and the tire retreading business for Canadian, U.S. and, hopefully, some Mexican dealers. It has a more intense focus on the North American retread business because there is no show for retreaders to go to in North America since the old Louisville show closed.
“This show is about the tire business and anything related to the tire business. Manufacturing equipment, retreading, repairing — anything that has to do with tires, this is it.”
[PAGEBREAK]
Changes in China
David Shaw, head of research for Tire Industry Research and author of “China’s Tire Industry, 2015-2018,” led off the exposition’s series of conferences. He talked about “China’s tire industry and its place in the world of tires.”
There are more than 400 tire manufacturers in China producing roughly half of the tires in the world, according to Shaw.
“China is an incredibly competitive market,” he said. “Price is a major issue in China. Prices are falling like stones because there are a lot of producers. If the prices are falling (so rapidly), you can imagine what those companies will do. They’ll try to export.
“A rough rule of thumb is that... if you make a certain number of tires, roughly half of those will be for domestic use, and half will be for export.”
Shaw said the vast majority of Chinese manufacturers “have no idea about marketing whatsoever.” As a result, they sell based on price, “and that is a major problem around the world.”
Domestically, there is almost no brand awareness in China. “Chinese consumers don’t know what a good or bad brand is,” he said. “They don’t really know the difference because there’s no information about that. The competition is all about price in that country. They’re very used to competing on price, and cutting the cost of production. That’s just the way they do business.”
Over the next two to five years, legislation will lead to a lot of changes in China’s tire industry, he said.
“China is rapidly becoming the most restrictive, heavily legislated country in the world in terms of tires. You think North America is difficult in the legislative situation? China is becoming much more difficult. China is putting in all kinds of policies and all kinds of laws.”
China’s leading players make up close to one-third of the total number of manufacturers. “The aim is to drive consolidation. (Chinese leaders) are aware this fragmentation of the business is a significant problem not only for China, but also for the reputation of Chinese tires abroad.
“They’re trying to drive consolidation, but there aren’t too many mechanisms within China to allow that consolidation to happen,” said Shaw.
“Although a lot of people say there will be consolidation, and it will start soon in 2015, I’m not totally convinced that’s going to happen in a big way, but we shall see.” ■
