The Hindu Business Line : Chinese move may impact tyre imports

Kolkata, July 2 Chinese tyres are fast losing their shine in India. The price advantage of Chinese tyres – which was already under pressure due to imposition of provisional anti-dumping margin on truck bus tyres and increase in reference price for valuation of import duties on passenger car radials – is now set to have waned further.

The credit now goes to the Chinese authorities. According to the All-India Tyre Dealers’ Federation (AITDF), in a bid to make the most of the coming peak season between July and November, the Chinese authorities have withdrawn the five per cent export subsidy and increased freight charges by 20 per cent for exports to India.

The new norms will brought into effect by China from July 1, only weeks before the anti-dumping authority in India is expected to come out with its final findings on alleged dumping of cross-ply tyres – primarily for heavy commercial vehicles – by China and Thailand.

The anti-dumping authority imposed a provisional margin by increasing reference price for truck/bus tyre imports from the two countries in October 2006 and was expected to come up with its final findings in the first fortnight of July 2007.

According to an AITDF release, India currently imports 85,000 commercial vehicle tyres (mostly cross-ply) and 1,25,000 radial tyres for passenger cars and multi-utility vehicles (MUV) a month, almost four per cent of the total consumption of tyres in India. Of the total imports 70 per cent is imported from China.

Despite provisional anti-dumping measures and the recent increase in reference price by the customs authority, imports were gaining pace in last three months due to rupee appreciation.

According to Mr S.P. Singh, convenor of AITDF, withdrawal of export subsidy and increase in freight by China will leave an impact of Rs 800-1,000 of a pair of truck bus tyre.

This is expected to reduce the price advantage of the top end of the imported truck bus tyres to a little more than Rs 1,000-1,500 a pair over the domestic brands available from a price range of approximately Rs 19,500.

“Considering that most of the imported brands do not offer warranty and enjoys poor brand-equity compared to major Indian brands, this price difference may not be adequate to attract customers,” he said.

The price-difference for MUV tyres may come down to Rs 700-800 per tyre.