Letter To All Our Customers
2016-12-10
Dear All Our Customers:
It is our great pleasure to thank all of you for your kind help and support during the past year 2016. ALTAIRE, with your help, achieved great records of production and shipment with constantly increasing market shares. Also, we hope that all of our customers and distributors will enjoy the growing turnovers and profits brought by ALTAIRE TYRE.
Recently the world witnessed the great changes of not only politics but also global economy. The tire demand and supply also return to a new balance with reduced production capacity in China but slowly increase of demand from various markets. The raw material cost, in addition, brings us much pressure on our finance reports. Thus, we are ready to announce our price increase on January 1st of the coming 2017.
Firstly, the demand on raw materials are coming back again. Newly elected US president, Mr. Donald Trump, vowed to "Make America Great Again!" and revive the U.S. manufacturing. The investors are excited by his promise and new economic plan, meaning more investment on infrastructures and manufacturing equipment and facilities in U.S. Such investment will mean more demand on raw materials and the expected demand rockets the price of metals, energy, and agricultural products in a short time. Natural rubber, as one of the agricultural product, is influenced significantly by the whole market with price increase of nearly over 60% during the past three months, and 23.5% just after the president election.
Furthermore, US
economy remains strong growth with a GDP growth of 2.9% in Q3, 2016. Meanwhile
the GDP growth of whole European Union keeps about 2% since Q4 2014, a steady 8
quarters increase. Russia and Brazil are recovering from their crisis years
ago. The slowing Chinese economy caught up the bottom line of 6.5% as per the
government promise. General speaking, the world economy, though rather slowly,
is growing steadily and recovering from the disappointing crisis 8 years ago.
Doubtlessly the growth will expand the business of logistics and automobile
industry, which are seeking for more tire supply.
Then for the tire industry, the demand is increasing while the overcapacity in China is being cut off. Such overcapacity really brought great trouble for most of us in the past years. Low price suppliers destroyed the market and distributors profits. However, since mid of year 2015 some incapable manufacturers announce bankruptcy or discontinue the business. More maintained the production with less than 50% equipment utilization. The reduction of total output is, step by step, rebuilding the balance between supply and demand in later 2016, even when the U.S. government imposed higher import duty on Chinese tires.
Based on the above we believe that a new future is waiting for all of us ahead. The tire industry will recover from the bottom of the past 5 years and move forward on the right track. The growing automobile population, especially in China and other developing markets, and the improving logistics will bring more demand on tires. However, the end users are seeking for tire with safe and value, which are the key mission of ALTAIRE. We, facing such a demand, are going to supply tires to our customers with excellent quality and service but reasonable price. We will try our best to improve the production efficiency to save the cost. Also, we will continue to support our distributors and partners to promote our brand.
Therefore, the price increase in the coming 2017 will help to cover our cost increase because of the raw materials. Then, we will still be in a strong position to continue our product upgrade, improve our production efficiency, and provide support to our distributors and partners. We will strengthen our advantage against our competitors and expand our market shares with mutual cooperation with our distributors and partners. We believe that all of us may craft a better future together.
Thank you very much for your kind attention and cooperation.
Best wishes,
ALTAIRE TEAM
2016-12-10
