Who Is Wanli? Industry Analyst Breaks Down the Chinese Company
Following leaks from South Carolina in early June that Orangeburg County is expecting an investment of $1 billion from a Chinese company named “Wanli,” many in the tire industry wanted to know more details. Chief among them was the question, “Who on earth is Wanli?”
The investment, we now know, is for a tire manufacturing plant. The answer to Wanli’s identity — and what it might represent globally — is more complicated.
Wanli Tire Corp. Ltd.’s profile has remained low, despite a number of appearances at the Las Vegas Specialty Equipment Market Association (SEMA) Show and custom car expos. The company wants to improve its name recognition in America, which will involve creating new sales channels here, and now this new factory. But not everyone at the company has gotten the message yet.
Since the revelations over the last few months, I have found it impossible to get hold of anyone from the company. When I asked to talk with Wanli representatives at the Latin American & Caribbean Tyre Expo in Panama in mid-June, the response was a standard stonewall that the relevant person was not available and any questions might take a few weeks to answer.
This typifies the situation at Wanli. The company is in the transition from an old-fashioned, State-owned enterprise to a modern, well-managed, globally minded company. Sales in 2015 were reportedly $520 million.
Fortunately, I have visited the company’s headquarters in Guangzhou, China, a couple of times and spoken with their executives on a number of occasions and also tracked their progress, especially over the last two years of significant transition, since they allied with the Anhui Jianghuai Automobile Group Co. Ltd (JAC).
The company was set up in 1988 as South China Tire & Rubber and began developing its products under license from U.S.-based Firestone Tire & Rubber Co.
In 2014 the company said it had the capacity to produce 10 million radial passenger and light truck radials and 2 million TBR tires annually at three factories in Panyu, Conghua and the Huadu district of Guangzhou in China. In 2017 the company said it can produce 16 million tires a year, of which 52% are exported.
The company splits sales between the original equipment and replacement markets, with around 30% going to car producers such as Dongfeng Motor Corp., Peugeot Citreon Automobile Co., JAC and GAC Honda Automobile Co.
Wanli Tire’s consumer tire products include high performance “comfort” models, along with sport, SUV, run-flat and studless winter tires as well as truck and bus tires.
Wanli is the flagship brand name. The official company name remains South China Tire & Rubber, though this is in transition to the Wanli name. The parent company is the State-owned Guangzhou Vanlead Group Ltd. The company sells passenger car tires and truck tires in international markets under brands such as Wanli, Sunny and a new export-only brand Aptani. It uses brands including Diamond in the domestic Chinese market.
Much of the transition is coming from Vanlead’s tie-in with JAC and JAC’s partner, Guangqi Honda Automobile Co. Ltd. JAC and Wanli have jointly built a state-of-the-art truck tire factory in Hefei, Anhui Province, and, despite contradictory claims by some other tire makers, the Hefei factory is seen within China as by far the best of the modern ‘Industry 4.0’ factories in the country. It was designed by China’s acknowledged tire factory master, Wang Auchun of the EVE Rubber Research Institute in Qingdao. He has designed many of China’s latest tire plants in China and overseas.
After a ground-breaking in March 2015, the first phase of the Hefei plant came on stream in November 2016 with a nominal 1 million units of TBR capacity per year. This is expected to rise to an annual capacity of 2 million truck/bus radials by the end of 2017, with an investment of about $285 million. The second-phase expansion in Hefei will add annual capacity for 20 million PCR tires, with an additional investment of $587 million.
Almost all the equipment is sourced from Western companies, and the plant is highly automated with a full MES system, barcode materials tracking and some automatically guided vehicles.
Prior to the Hefei project, Wanli’s sister company, Guangzhou Fung Rubber Tire Co. Ltd., built a passenger car tire plant in Conghua City, Guangzhou, with capacity for 10 million tires per year. That came on stream in August 2015.
During 2016, Wanli closed its old factory at Panyu in Guangzhou and transferred production to the new unit in Hefei. The Panyu factory was subject to pollution control notices. As the city of Guangzhou expanded, the factory, built in a remote location, became surrounded by residential buildings, and the residents complained of smells and pollution.
Over the last year and a half, Wanli has been on an aggressive international expansion program. This was launched at the 2016 Tokyo Motor Show with a series of exotic concept tires and an updated “W” logo to represent the company.
In February 2016 Wanli’s processes won accreditation to ECE R117.02 from TuV Rheinland for its Comfort H220, snow and SW211 tires.
At the Tokyo launch of the company’s global strategy, Wanli Tire Chairman Chen Miao said Wanli’s entry into the Japanese market will provide a foothold for a global expansion strategy.
There is more to the company’s latest plant announcement than the initial headlines of a large factory in the U.S. The facility initially will have a PCR capacity of some 6 million units, followed by a second phase investment with TBR capacity of up to 2 million units.
Wanli said it also expects to add a tech center in Akron, Ohio, and another in Europe, but did not give a time frame for either investment. There currently is no investment figure for these projects.
Wanli is said to be recruiting tire engineers from a range of established tire makers.
In addition to running one of the most energy-efficient and water-efficient plants (the Hefei factory) in China, the company is exploring end-of-life tire recycling options. Vanlead and its Wanli tire subsidiary have signed a memorandum of understanding with Swedish company Enviro Tire Recycling. Under the deal, Enviro will build a turnkey factory to make recycled carbon black from waste tires.
The new factory will be located in Guangdong, and will begin construction at the end of 2017. When it begins operation, the factory’s annual output is set to reach 30,000 tons of reclaimed carbon black. ■
The news about Wanli Tire Corp. Ltd. is not all good. In May this year, Bridgestone Corp. said it had successfully fought an intellectual property court case against Wanli. Bridgestone said Wanli had copied the tread pattern of its SUV tire, the Dueler A/T Revo2.
The Shanghai Intellectual Property Court ordered Wanli to cease manufacturing and sales activities that are in violation of Bridgestone’s patent rights, dispose of related molds, and pay unspecified damages.
David Shaw is owner of Shaw Information Services Ltd., which trades under the Tire Industry Research banner. As head of research, he has put together a massive report on “China’s Tire Industry 2015-2018.” He can be reached at email@example.com.