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Tyre foreign companies double environmental standards when prohibited
China has become the world's largest tire producer, with its share of the global market steadily increasing over the years. The Chinese tire market is growing at a rate exceeding 20% annually, prompting multinational tire companies to intensify their investments in the region. These corporations have poured capital into factory construction, localized research and development, and the expansion of retail networks, leading to substantial profits. However, this rapid growth has also resulted in significant resource waste and environmental pollution.
The competition among multinational tire companies has intensified, especially in the tire sales and retail sectors, where the latter accounts for two-thirds of total tire sales. A company’s market share in the retail segment largely depends on the breadth and depth of its distribution network. As a result, expanding sales channels has become a key strategy for these firms to gain a competitive edge. They are all accelerating their expansion efforts to capture more market share.
Goodyear was one of the first multinational tire companies to enter China. Recently, it shifted its focus toward sales channels, business models, and after-sales services. In just six months, Goodyear opened 300 retail franchise stores, averaging two new locations per day. This aggressive expansion reflects its commitment to dominating the Chinese market.
Michelin, another major player, has invested over $400 million in China to strengthen its position. It now operates factories in Shenyang and Shanghai, with more than 300 dealers. The company adds over 100 new dealers annually, showing strong growth in the region.
Bridgestone has also significantly increased its investment in China. It has become the world’s largest tire company to build factories in the country. A single factory in Huizhou required an investment of RMB 5 billion, sending shockwaves through the industry. Additionally, Bridgestone has established multiple tire factories and R&D centers in Jiangsu, including a large testing ground covering 839,000 square meters in Yixing.
Hankook, which considers China as its most important market, has set up facilities in Jiaxing and Jiangsu. It currently holds a leading position in the Chinese car tire market and aims to open 300 franchise stores within five years to compete with other global brands. Hankook has also launched a full-vehicle production line, expected to produce 60,000 tires annually.
Despite their economic success, multinational tire companies have raised serious environmental concerns. Many failed to implement the “three simultaneous†system during initial construction, neglecting wastewater treatment and discharging pollutants illegally. Some even bypassed pollution control measures, leading to a sharp rise in environmental violations.
In January 2007, Michelin’s subsidiary, Michelin Warriors Limited, was penalized by the State Environmental Protection Agency for violating environmental regulations. Another project faced four major issues, including non-compliance with pollution control standards, excessive emissions, and noise pollution. The company was ordered to rectify its actions or face legal consequences. However, Michelin’s response was slow, resulting in repeated violations.
Industry sources indicate that tire manufacturing involves numerous chemical processes, and without strict controls, it can lead to severe environmental damage. The Michelin case highlights the risks associated with lax environmental management.
Many multinational tire companies attribute their environmental violations to cost pressures. Rising raw material costs and pressure from automakers to reduce expenses have led to reduced investment in environmental protection. However, despite these pressures, many foreign brands, such as Bridgestone, Michelin, and Goodyear, have raised prices by 3% to 5% in 2007. These price hikes continue today, allowing companies to offset rising costs and even increase profits.
This behavior suggests that a lack of environmental responsibility and a blind pursuit of profit are major factors behind the pollution caused by multinational tire companies in China.
Beyond environmental issues, these companies continue to expand their operations, building more factories, opening new stores, and launching new projects. This growth places a heavy demand on resources such as rubber, carbon black, land, and labor, further straining the environment.
After years of development, the Chinese tire market has matured, yet multinational companies are still expanding rapidly without sufficient planning. This unchecked growth raises concerns about long-term sustainability.
Environmental violations by multinational corporations have become increasingly visible. Over the past two years, the number of foreign companies listed as polluters has risen sharply, from around 80–90 to nearly 300 today. Many of these companies had previously been seen as environmentally responsible. In some cases, they even used environmental protection as a competitive advantage.
However, in China, some multinational corporations adopt a dual standard—strictly adhering to environmental rules in their home countries but relaxing them in developing markets. This discrepancy undermines their corporate responsibility and contributes to worsening pollution.
Experts suggest that addressing this issue requires strengthening the legal framework, ensuring equal treatment of domestic and foreign enterprises, and enforcing stricter supervision and penalties. Illegal foreign-funded companies should be shut down, and local governments should avoid favoring multinationals at the expense of environmental protection.