Chinese Tyre Makers Expand In Malaysia Amid Continental & Goodyear Factory Closures
Western tyre companies out, Chinese tyre companies in.
By Yap Wan Xiang — 05 May 2025, 04:13 PM
Chinese tyre companies are ramping up their investment in Malaysia following the closure of the Goodyear factory in Selangor and the impending closure of the Continental factory in Kedah
Last week, German auto supplier Continental announced plans to shutter its plant in Alor Setar, which employs 950 workers, by the end of 2025.
Kedah Menteri Besar Datuk Seri Muhammad Sanusi Nor said the closure was a business decision to relocate to Thailand, likely driven by lower costs, and not due to any dissatisfaction with him or the state government, reported FMT.
Sanusi added that another company has expressed interest in taking over the Continental plant, but he declined to name it to protect its competitive advantage.
Meanwhile, state industry and investment executive councillor (EXCO) Haim Hilman Abdullah said a tyre manufacturer similar to Continental is set to open a factory in Padang Terap.
He also did not name the company. However, he said the Kedah government will assist Continental's employees by matching them with job opportunities in other companies.
Continental still operates a factory in Petaling Jaya, employing around 500 workers to manufacture off-the-road tyres for material handling and agricultural applications, reported The Edge.
Continental's impending factory closure comes after Goodyear Malaysia's closure of its Shah Alam factory, which employed 550 workers, in June last year
Speaking to Berita Harian, economic analyst Dr Mohamad Khair Afham Muhamad Senan said that while the loss of these factories has short-term impacts, it also creates opportunities for industrial transformation towards a high-value economy.
He contended that Malaysia's success depends on its ability to leverage existing assets while adapting swiftly to new technological trends and market demands.
"New investments worth RM2.3 billion from Chinese companies such as Shandong Linglong in Kedah Rubber City (KRC) prove that Malaysia is still relevant as a global rubber hub, especially in the high-value production segment.
"The country's strategic location as an ASEAN logistics hub, coupled with a comprehensive rubber industry ecosystem — from plantations to downstream manufacturing — gives Malaysia a competitive edge over regional peers," he said.
In addition to Shandong Linglong, Prinx Chengshan recently announced in its financial report that it will establish a production base in KRC within the Northern Corridor Economic Region (NCER).
Similarly, Shandong New Continent Tire announced in March that it will establish Jiafu Industrial Co. in Malaysia and build a radial tyre production plant in 2025.
These new entrants build upon existing Chinese investments in the sector, such as Zhaoqing Junhong Corp Ltd and Fullrun Tyre Corp, which began operations in the Malaysia-China Kuantan Industrial Park in 2019 and in Klang in late 2018, respectively, noted motoring journalist Daniel Sherman Fernandez.
