Chinese radials giving Indian players tough time

01/07/2008 12:00 - 726 Views

Jun 30, 2008 (The Times of India - McClatchy-Tribune Information Services via COMTEX) -- APTYF | Quote | Chart | News | PowerRating -- The Dragon is biting the Indian radial truck and bus tyre manufacturers hard. While demand of radial tires for commercial vehicles is shooting up and domestic players are unable to match the supply, Chinese truck/bus radials are fast gaining a foothold on the Indian roads.

While Indian manufacturers advocate the benefits of radials, like better fuel efficiency, they are also concerned about the pace of Chinese imports. Pushed to the wall, leading domestic manufacturers like JK and Apollo Tyres have demanded imposition of anti-dumping duty on Chinese imports to restrict supply from abroad and protect their own turf.

Government had slapped anti-dumping duty on import of cross-ply tires in 2006, but these manufacturers now want a similar step against import of radial tires as well. According to Automotive Tyre Manufacturers Association (ATMA), truck/bus radial tire import has gone up from 88,000 units in 2003-04, to 12 lakh in 2007-08, with almost 85 percent of supplies coming from China. Almost 35 brands from China -- like 'Jinyu', 'Double Coin' and 'West Lake' -- sell in Indian market.

Though radial penetration in the truck/bus segment is very low at 4-5 percent, its adoption is growing rapidly in the after-market segment. More transporters are switching to radials for higher fuel efficiency, with around 30 percent reduction in cost. Despite the Chinese products do not have adequate service support here, it is estimated that of the 4000 truck/bus tire dealers, around 700 are dealing in imported Chinese tires.

At a time when Indian manufacturers are making investments to catch up with the demand, rising Chinese import is hitting them in two ways -- eating up share in their conventional cross ply tire market and also threatening their own radial plans.

According to Raghupati Singhania, MD, JK Tyres, who is also chairman of ATMA, "cheap" Chinese products are being dumped here. Singhania said while demanding the anti-dumping duty, he is only opposing the "unfair pricing" by the Chinese manufacturers. "Nobody is opposing imports. But our studies have shown that Chinese companies are selling in India at prices cheaper to what they sell in their domestic market. This is clearly dumping of their products here," Singhania added.

Rajiv Budhraja, DG, ATMA, said most of the imports from China are in the nature of dumping. "These tires are being sold at almost 30 percent cheaper than the Indian tires."

However, SP Singh of All-India Tyre Dealers Federation (AITDF) differs with the anti-dumping theory and demands that Chinese imports should actually be made even more cheaper by abolishing the import duty. "Radialisation is good for the fleet operators and truckers and with no big supply from the domestic players, and the government should take steps to incentivise imports," he said.

 

Thursday, July 03, 2008; Posted: 12:28 PM

Source: www.tradingmarkets.com

 
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