Imports From China On The Rise

The advent of new cars in the booming automobile market has brought automobile market has brought about a sea change in tyre technology with major companies launching next-generation tyres in the Indian market.

 The tyre industry has posted a strong double – digit growth of 12 percent till January 2007, rolling out 610.40 lakh tyres.

 There are 37 tyres companies in India of which Apollo, Ceat, MRF, JK Tyre Birla, Bridgestone, and Goodyear control about 95 percent of market share.
 Owing to  the huge requirement of commercial vehicle tyres, imports from China have seen a steady rise, due to comparative prices. “Tyres imported from china are 20-25 percent cheaper than Indian tyres. In an oligopolistic tyore market controlled by a few companies, we are witnessing a massive increase in import of cheaper Chinese tyres into India, which are growing by 200 percent”, says S.P. Singh of the All India Tyre Dealers Federation, the apex body of tyre dealers in India.

 The Commercial vehicles market leader, Tata Motors, is scouting for Chinese tyre companies to meet its growing need for cost-effective truck and bus, cross-ply and radials tyres. Tata Motors has placed orders for close to
5 lakh truck-bus tyres (including both radial and cross-ply)for original equipment requirement with its Chinese suppliers.

 Tata Motors has reportedly placed orders with two Chinese tyre manufacturers – Shandong jinyu Tyre Company and Pearl River Tyre-among others to supplytyres for its operations in India. Other vehicle manufacturers like Ashok Leyland and Eicher Motors are also planning to import cheaper Chinese tyres.

 To boost competition, the government has reduced customs duty on tyres to 10 per cent from 12.5 percent. This is expected to directly impeact the prices of various categories  of tyres.

 Besides this the government has imposed anti-dumping duty on tyres imported from China and Thailand Government officials say that the move is in view of the large number of low quality Chinese tyres flooding the Indian Market. The step will protect Indian tyre manufacturers against the low-cost low-quality imported tyres.

 The Automotive Tyres Manufacturers Association (ATMA) has welcome the interim antidumping duty. “Import of cheaper tyres from china and other countries has brought to the fore issues related to quality and direct import by small traders to rake in huge profit. We are expecting regular anti-dumping duties on tyres by the end of April”, says D. Ravindran, Director General, ATMA.

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