Chinese Tyre Imports Surge Despite Dumping Duty

(Hindu Business Line) India’s anti-dumping ruling on the imports of truck and bus tyres in July 2007 does not seem to have reduced the share of Chinese tyres in the domestic replacement market, as the price difference in the product made in the two countries continues to be in the range of 10%-30%.

The import of commercial vehicles tyres surged in the last five years, with the Chinese tyres constituting 91% of the overall tyres brought into the country, according to the data from the Directorate General of Commercial intelligence and Statistics till September 2007 and the estimated data by the Automotive Tyre Manufacturers Association (ATMA) till March 2008.

The association estimates that the major competition is in the replacement market where there is a tussle between products from domestic companies like Apollo, JK, MRF and imported tyres. This is mainly due to the margins being the highest in the replacement market.

ATMA reckons that the share of Chinese tyres in the domestic replacement market has risen from 0.3% in 2002-03 to 14% as on the year ended Mar. 31, 2008.

“Since the anti-dumping ruling was on bias truck and bus tyres, there is now a shift in imports to radial tyres. However, even the radial tyres which are being brought into the country are available at a much lesser price, resulting in growing imports,” said Satish Sharma, chief of India operations for Apollo Tyres.

Bias tyres are of lower quality, can withstand overloading pressure and are priced lower compared with radials, which are of superior quality and priced higher. But due to the road conditions here, most companies are producing bias tyres which can survive in all conditions.

“The rising import of commercial vehicle tyres clearly demonstrates that the anti-dumping duty has been ineffective. Despite the ruling, which increased the anti-dumping duty to $135 from $75, price differences in the domestic and Chinese replacement market is in the range of 10%-30%,” said Rajeev Buddhiraja, director general of ATMA.

Considering the present context of increased raw material prices, anti-dumping duty must be benchmarked to $160 to $170, he said.

ATMA also said that the inverted duty structure under which the imports attracted 10% customs duty, as against 20% on natural rubber, also contributed to the surge in tyres being brought into the country. (Tire Review/Akron)

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