Now, Tyre Man­u­fac­tur­ers Want Anti-dump­ing Duty on Chi­nese Ra­di­als

Im­ports of truck and bus ra­di­als up 64% in FY16, says in­dus­try body; forced to idle plants, claim cos

The Economic Times - - Companies: Pursuit Of Profit - Nabeel.Khan@

timesin­ter­ New Delhi: In­dia’s tyre man­u­fac­tur­ers want the govern­ment to im­pose an an­tidump­ing duty on truck and bus ra­dial tyres com­ing from China, claim­ing that the cheap im­ports were hurt­ing their busi­ness and forc­ing them to idle plants.

Im­ports of truck and bus ra­di­als (TBRs) have in­creased 64% from a year ear­lier in the fis­cal year ended on March 31, ac­cord­ing to the Au­to­mo­tive Tyre Man­u­fac­tur­ers As­so­ci­a­tion (ATMA). Av­er­age im­ports in the past year were well over one lakh units a month, com­pared with a lit­tle over 65,000 in fis­cal 2015 and about 41,000 the year be­fore, the as­so­ci­a­tion said.

China ac­counted for more than 90% of the im­ports last fis­cal year from just 40% in 2013-14, with the govern­ment in Fe­bru­ary 2015 lift­ing anti-dump­ing duty im­posed on it. TBR ex­port prices from China are sig­nif­i­cantly lower than the prices of such tyres in the Chi­nese do­mes­tic mar­ket and com­pared with prices of other ex­porters such as Thai­land and South Korea, ATMA claimed. “Govern­ment needs to take ur­gent mea­sures to halt such sharp surge in im­ports and dump­ing of tyres,” said KM Mam­men, the ATMA chair­man who also heads In­dia’s top tyre maker, MRF. “Tyre man­u­fac­tur­ers in In­dia have made ma­jor in­vest­ments to­wards green­field and brown­field projects for man­u­fac­tur­ing of state-of-theart ra­dial tyres. But in­dis­crim­i­nate im­port and dump­ing of cheap tyres from China are queer­ing the pitch for do­mes­tic man­u­fac­tur­ing,” he said.

In the first nine months (April-De­cem­ber) of 2015-16, for which num­bers are avail­able with ATMA, the av­er­age per month do­mes­tic TBR tyre pro­duc­tion was over five lakh units. Ca­pac­ity util­i­sa­tion lev­els of the in­dus­try in case of TBR man­u­fac­tur­ing fell to 70% in 2015-16 from 80-85% the pre­vi­ous fis­cal year.

Ac­cord­ing to lo­cal tyre mak­ers, the cost of im­port­ing tyres works out less than the cost of raw ma­te­ri­als in In­dia. Be­cause of the price ad­van­tage, Chi­nese TBRs now ac­count for 30-40% of the re­place­ment de­mand in In­dia, they said. Dump­ing is also hurt­ing the truck-bus bias tyre seg­ment, they claimed.

While In­dia lifted anti-dump­ing du­ties in Fe­bru­ary 2015 on Chi­nese tyres, nu­mer­ous other coun­tries im­posed that on Chi­nese im­ports, said Gau­rav Kumar, chief fi­nan­cial of­fi­cer at Apollo Tyres. “In­dia has opened its mar­ket for low cost tyre im­ports from China, thereby putting at risk the govern­ment of In­dia’s clar­ion call on Make in In­dia”.

Ac­cord­ing to ATMA, tyre mak­ers in­vested about .₹ 35,000 crore on set­ting up ca­pac­ity for TBR Tyres as it is the fastest-grow­ing seg­ment. In­dus­try es­ti­mates show the TBR seg­ment is ex­pected to be 65% of the to­tal truck & bus tyre mar­ket in In­dia in the next four to five years from about 35% now. Cur­rently, bias tyres ac­count for 65% of the to­tal bus and truck tyres.

In­dia’s truck and bus tyre ex­ports fell 14% in April-Novem­ber 2015-16 from a year ear­lier to over 1.24 mil­lion units.

“In­dian tyre com­pa­nies have sought in­ter­ven­tion by the au­thor­i­ties,” said Vivek Kamra, pres­i­dent of In­dia oper­a­tions at JK Tyre & In­dus­tries. “Most de­vel­oped economies that have tyre man­u­fac­tur­ing ca­pac­i­ties have taken ac­tion against Chi­nese im­ports ei­ther through re­stric­tions or through du­ties. We are sure that sim­i­lar ac­tions will be taken very soon in In­dia."

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