According to media reports, the perpetual slowdown of vehicle sales has seriously impacted a number of tyre companies like Apollo, Birla, Bridgestone, Ceat, Goodyear, JK Tyres and MRF who are forced to resort to a 25 per cent cut in its production in the upcoming months. The 1300 per cent jump in imports of Chinese tyres had made it worse for them. It has been learnt that Automotive Tyre Manufacturers Association has urged the government to impose anti-dumping duties on import of radial truck and bus tyres at the earliest. Off late, imposition of import duty by up to 40 per cent on the Indian tyre export markets like Malaysia, Vietnam, Indonesia, Thailand, has further reduced their margins.

According to ATMA, while the slowdown in the automobile sector has impacted the OE business, cheap imports and large scale dumping of tyres from China has created havoc with the replacement segment, forcing the tyre industry to go for production cuts. Tyre companies supplies to OEs have also gone down by over 70-75 per cent on account of a heavy cut in production announced by vehicle makers and this segment accounts for 25 per cent of their entire business. Additionally, there is a dip of 5-10 per cent in demand in the after-market.

As per the figures revealed by ATMA, truck/bus radial tyre import has gone up from 88,000 units in 2003-04, to 12 lakh in 2007-08, with almost 85 per cent of supplies coming from China. Almost 35 brands from China - like 'Jinyu', 'Double Coin' and 'West Lake' - sell in Indian market. The figures also indicate that imports of low-cost tyres from China shot up by mammoth 60 per cent to 2.45 million tyres in April-Oct’08 as against 1.54 million in the corresponding period a year ago. This has ultimately reduced demand for domestically produced tyres by almost 30 per cent over the last few months. India’s total tyre production stood at 49.3 million units during the April-October’08 period, vis-à-vis 46.4 million last year, as stated by ATMA, adding that over 1 lakh truck and bus tyres are being imported from China every month, which is about 15 per cent of the domestic market.

According to a senior representative of ATMA who requested anonymity, these tyres, imported mostly from China, are being sold at the retail level at a price almost 30 per cent cheaper than the Indian tyres. He added by stating that the US was a major export market for China earlier. But the demand slump in that country has made Chinese tyre producers shift their focus towards India and they are selling here at a throwaway price.

Posted on 12/22/2008 10:46:15 PM

Source: www.wheelsunplugged.com