The Goodyear Tire & Rubber Co, the first foreign tire maker to build a factory in China, will for the first time produce commercial tires in a new plant in Dalian to tap the fast-growing market.

The US company announced late in June it would make an initial investment of about US$500 million for a new plant in Dalian, a port city in Liaoning Province, in conjunction with the closure of an old factory there.

In an interview yesterday, Michael Martens, managing director for North Asia, said the new facility will help boost local supplies of commercial truck tires to meet demand in line with China's booming logistics industry.

Currently, its commercial business in China is supplied by imports, as its old Dalian plant only produces passenger and light truck tires.

Goodyear found it could not expand the old plant in Dalian's Shahekou which was landlocked by residential developments and will therefore begin moving its production to the new plant in Pulandian by late 2010, when construction is set to be finished. The transfer of production will be completed by 2012, when the Shahekou plant will be completely closed.

Martens declined to reveal the capacity for the new plant for competitive reasons but said it would be Goodyear's first greenfield project in 20 years globally and represented its largest investment in Asia at the least.

Goodyear, which competes with global rivals such as French maker Michelin and Japan's Bridgestone Corp in China, the world's second-largest car market, will quickly expand its retail network here, Martens said.

Bridgestone said on Monday it would increase tire prices in China. Asked if Goodyear would follow, Martens said: "We have to constantly assess the prices and how the competition is, and then we will make up our mind."

(Shanghai Daily July 9, 2008)