Guizhou Tyre's Global Expansion: A Strategic Leap into the European and Vietnamese Markets

Guizhou Tyre is executing a multifaceted expansion plan. Known internationally for its Advance and Samson brands, the company is making significant strides in both production capacity and market reach.

Guizhou Tyre's Global Expansion: A Strategic Leap into the European and Vietnamese Markets
June 27, 2024

European Market Expansion

Guizhou Tyre is setting its sights on the European Union, aiming to increase sales with a focus on its flagship Advance brand. This strategic push into the European market underscores the company's commitment to expanding its global footprint and enhancing brand visibility in one of the most competitive markets worldwide.

Vietnam Production Hub

Vietnam has emerged as a pivotal location for Guizhou Tyre's production capabilities. The company already operates multiple factories in the region, which play a crucial role in its overall production strategy. Currently, an existing plant produces 1.2 million all-steel radial tyres annually, while another facility manufactures 950,000 high-performance all-steel radial tyres each year.

Adding to this robust setup, Guizhou Tyre has announced a substantial investment of $228 million to establish a new factory in Vietnam. This facility is projected to have an impressive annual production capacity of 6 million semi-steel radial tyres for passenger cars. The factory is expected to reach 60% of its capacity within the first 12 months of construction and achieve full capacity by the fourth year. At maximum output, the plant is anticipated to generate annual sales of $180 million and an estimated profit of $28.6 million, with an investment payback period of just over seven years.

Expansion in China

Domestically, Guizhou Tyre is investing $286 million to expand its radial tyre production capacity in China. This investment aligns with the company's broader strategy to strengthen its manufacturing base and cater to the growing demand for high-quality tyres.

In 2022, Guizhou Tyre produced a remarkable 7.25 million tyres, with overseas sales constituting about 33% of the total sales. This international focus is further evidenced by their plans to enhance their production of passenger car tyres specifically for overseas markets.

Solid Tyre Production

Further diversifying its product range, Guizhou Tyre has earmarked £33.5 million (RMB 300 million) for the production of solid tyres. This move is expected to bolster the company's offerings in the specialised tyre segment, catering to niche markets such as heavy off-road vehicles.

Product Portfolio and Market Strategy

Guizhou Tyre's product range includes tyres for trucks, construction machinery, and farm equipment, with specialised products for heavy off-road vehicles. The expansion in Vietnam is particularly aimed at reducing overall production costs and improving product profitability, a strategic move to enhance competitiveness in the global market.

By focusing on cost-effective production and targeting key international markets, Guizhou Tyre is not only broadening its global reach but also fortifying its position in the tyre manufacturing industry. The company's consistent investment in expanding its production capabilities and product range highlights its commitment to growth and innovation.

As Guizhou Tyre continues to implement its expansion plans, it is poised to become a more prominent player in the global tyre market, leveraging its established brands and new production facilities to drive future growth.


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