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Cheaper Chinese Tyre Imports Flood India's Domestic Market

Date 02-December-2014
Subject Cheaper Chinese Tyre Imports Flood India's Domestic Market

The domestic tyre industry, which is already reeling under a prolonged slowdown, is now waging a lost battle against an ever-increasing Chinese imports. In anticipation of the enforcement of stringent anti-dumping policies in countries like the US, the Chinese tyre makers are believed to be dumping stocks in India, industry officials told dna.

Alarm bells have started ringing as imports from China increased almost 10-15% this financial year. It is likely to go up further. According to news agency reports, the US department of Commerce's International Trade Administration will take a decision in January 2015 on the anti-dumping duty investigation against Chinese passenger and light truck tyres.

Confirming the development, Rajiv Buddharaja, president, All India Tyre Manufacturers Association (ATMA), said, "It is a big issue for passenger vehicle and truck radial manufacturers. Chinese tyres are cheap and do not have necessary mandatory safety markings. Chinese are feeling the heat in the USA due to the upcoming anti dumping policy, hence they (Chinese tyremakers) are pushing their volumes in India."

Indian tyre market is estimated to be around 4,50,000 tyres a month, out of which replacement market is around 2 lakh tyres a month. Chinese radial tyres are 25% cheaper than the domestically manufactured tyres, hence most private taxi operators go for imported tyres.

Despite positive sentiments, the automobile industry has not seen any recovery in volumes during this financial year. While there has been a decent growth in the two-wheeler sales, car sales are expected to grow a mere 4-5% by the end of this financial year even as commercial vehicle (CV) industry continues to remain in negative terrain. Tyre manufacturers, which had anticipated a growth of 8-10% every year in FY11 and FY12, have invested heavily in building capacities. Owing to the ongoing slowdown, the capacities of most tyre makers are being underutilised.

According to ATMA estimates, sales of tyres industry this year have grown in tandem with the auto sales. While the demand from auto makers -- who are called Original Equipment Manufacturers (OEMs) in the industry parlance-- has remained flat, there has been a small surge in the replacement demand.

"A good percentage of growth in the replacement market has been taken away by the Chinese imports this year," said Buddharaja. Though there are certain anti dumping policies for import of CV tyres in India, there are no such policies for passenger vehicle radials.

Ajay Sevekari, director, Bridgestone India, said, "If there are no restrictive policies soon, we will see flooding of Chinese tyres in India. We have been discussing the issue with the government but there is no clarity."

Source:dnaindia.com

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