Interview with Mr. Sui Li, General Manager of Gubold Tire China

The economic crisis has had a major impact on major companies, and there has certainly been some impact on Cooper Tires. However, due to the focus on replacing the market, the impact is not great. Cooper's sales in the first half of the year still maintained double-digit growth, and the overall sales for the whole year were also good.

In recent years, China’s car ownership has been on an upward trend. In 2008, China has become the world’s second largest automotive consumer market after the United States. Therefore, for the Chinese auto market with an overall volume of more than 15 million, this year's downturn and relatively low growth may have little effect on the replacement of the tire market. More tire manufacturers have moved to replace the tire market, but since Cooper has a history of replacement tires for nearly a hundred years, compared with other tire manufacturers, there are advantages, but in 2009 we will be more cautious.

In addition, the off-road tire market where Cooper's dominant product line (4X4 tires) is located is China's fastest-growing segment market in recent years. So far this year, off-road vehicle sales have maintained a 35% growth, and have not been affected by the downturn in the auto market. At the same time, the replacement frequency of off-road tires is also higher than that of passenger cars. As a result, sales of Cooper's off-road tires have maintained their consistent high growth.

Faced with the complex turbulence in the industry, we strive to provide products with higher price-to-value ratios, increase product value and use efficiency. We will help stabilize prices and control costs by reducing scrap rates. In fact, this year, the efficiency of Cooper's Shandong production line has increased by 40%, and the scrap rate has dropped below 3%. Cooper believes that improving the quality system from within is the only way out, and is very happy to see this year's results.

In 2008, Cooper launched Dean brand passenger car tires for mid to high-end markets, Cooper Celeron ASP passenger car tires and Starfire RS-W 3.0 in extremely harsh snow, ice and mud conditions. Winter tires, the market responded well. In 2009, Cooper will continue to compete in the market of product quality - Dean series, Starfield series and Cooper All Terrain SUV/LT products will add new specifications to meet more market demand, the new brand Chengshan SPORTCAT, and ATHENA will be introduced to the market. At the same time, the development of new guided tires and engineering tires under the Chengshan brand is also planned.

At the same time, Cooper strives to provide consumers with high added-value fleet cost management solutions to deal with complex market conditions. Taking Shanghai's first Deanka bus flagship store as the starting point, Cooper has introduced the overseas model of the distribution mode of advanced truck and passenger car tire shops - offering customers comprehensive sales, rapid maintenance, repair, refurbishment and tire replacement of tires and tire accessories. The integrated service provides consumers with high value-added fleet overall cost management solutions to deal with complex market conditions.

For Cooper, the challenge in 2009 was not the downturn in the auto market, but the cost pressure caused by rising raw materials.

In terms of cost, we hope to guide consumers to use tires with better habits to maximize tire efficiency. The data shows that the current truck and bus tires in the market are usually scrapped for 100,000 kilometers. However, with the standard use guidance and professional tire maintenance, ordinary truck and bus tires will increase mileage by at least 50%. If we can regulate the habits of new tires and help consumers develop a scientific habit of using tires, we can effectively save costs and improve the competitiveness of our fleet. Play the highest value of truck and bus tires - this is the ultimate goal of Cooper.

Cooper's response will be mainly reflected in:

a. Capacity increase, this year, Cooper's capacity has increased by 20% on the basis of no increase in labor costs.

b. Saving energy use, data show that this year's energy consumption per tire production saves 30%

c. The improvement of production quality, as of August, Cobalt's product qualification rate has improved much more than last year. The increase in the passing rate of production also reflects the decrease in the market rate of claims. At the same time, our tires have won many customers who value quality in the market.

In 2009, the survival of tire companies will be even more difficult. Every family will seek new ways to survive. However, users in 2009 not only focused on product prices, but also considered quality and overall cost. Chinese consumers are smart and what companies need to do is give them the right guidance. The cost innovations, high value-added services, and overall cost of ownership we propose are all closer to consumers and distributors.

The impact of the financial crisis on the company is certainly there, but we will respond with a flexible corporate culture. Cooper is not big, so it can adapt to market development more quickly. In 2009, we will do our best to do market activities, brand promotion and channel laying. In terms of output, 25% of Cooper's products come from China. Therefore, in the period when the world is struggling to cope with the industry downturn and the financial turmoil, the Asia-Pacific market can bring some future prospects for Cooper.

At the same time, the government is still relatively supportive of the industry. At the end of 2008, the State Council of China allocated RMB 4 trillion to stimulate the economy. Higher requirements were placed on infrastructure construction and construction and transportation, which would increase domestic truck demand and greatly stimulate the commercial vehicle market. As far as the domestic commercial vehicle market is concerned, the relative monotonous products, low birth rate of radial tires, and low safety of plain transport tires and passenger tires all contribute to the industry's considerable progress. We believe that there is demand in the market and we can have more opportunities.

In 2009, Cooper will demonstrate its footing in the commercial vehicle market. We already have mature retreading tire partners and hope that we can carry out fruitful cooperation. We hope that 2009 will be a further year for the future and a deeper year for the Chinese market. We will do more in channels, sales, and markets.

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