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10. August 2006

INDIA: Tyre dealers oppose move for dumping duty on imports from China and Thailand

All India Tyre Dealers Federation believes that
imports are here to stay and is going to have a
long-term impact on trade and services.

The recommendation for imposing provisional
anti-dumping duty on import of cross-ply tyres from
China and Thailand seems to have brought the domestic
manufacturers to a stand-off with its dealer network
and sections of user industry as well.

"I have been witness to numerous anti-dumping cases
but this is possibly the first time that dealers have
joined the argument in opposing the industry," Mr D.
Ravindran, Director-General of the All India Tyre
Manufacturer Association (ATMA), told Business Line
adding that the association had no objection to
imports as long as it was not sheer dumping.

All India Tyre Dealers Federation (AITDF), which had
objected to ATMA's anti-dumping plea before the
designated authority, however, believes that imports
are here to stay and is going to have a long term
impact on trade and services for two reasons: First,
new players are bringing in new trade practices like
paving way for higher rate of return to the dealer
network.

Second, apart from the low-end products, imports are
increasing at a faster clip in the high-end category
as well.

"Unlike in the past, today 22-25 per cent of imported
tyres for the commercial vehicle segment are high-end
branded products and is giving tough competition to
domestic manufacturers. The share of these products is
bound to increase in the future," says Mr S.P. Singh,
convenor of AITDF. The debate also brings forth
growing share of imports in the replacement market.

According to AITDF, the monthly sales of imported
tyres for commercial vehicles now stand close to
76,000.

This roughly includes 50,000 cross-ply tyres (mostly
of low-haulage, replacement to re-treaded or repaired
category) for HCVs, up from 11,000 recorded during the
14-month period of investigation till June 2005.

While no official figures are available for the recent
months, the increase is primarily attributed to the
recent Supreme Court verdict concerning over-loading,
which had created a market for low-haulage tyres. In
fact, some lesser-known low quality domestic brands
like Wear Well owned by Betul Tyres are also believed
to be doing well for the same reason.

While the sales of imported tyres are still far lower
than the total annual replacement sales of 77-78 lakh
tyres by the domestic manufacturers, sources say that
in all segments sales of imported tyres grew much
faster than that registered by the tyre majors.

The growth is most prominent in the truck-bus radials
where sales of Chinese versions trebled to roughly
5,000-6,000 in last six months.



(Syed Rashid Ali, Karachi, Pakistan)

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