Chinese tyre imports rise by 40% in June quarter

Chinese tyre imports of truck and bus radial (TBR) tyres to India has grown over 40 per cent compared to imports during the June quarter last year. This is at a time when the overall growth in the truck replacement industry during the quarter was in the high single digits.

According to the industry, Chinese imports would be in excess of 35 per cent of the TBR replacement market.

Industry sources said total tyre imports in April to June during financial year 2017 was 2.46 million, as against 2.14 million during the same period last year, up by 15 per cent.

TBR imports during the same period rose by 40 per cent to 4.23 lakh from 3.02 lakh and passenger car radial (PCR) imports during the three months ended June 2016 increased by 22 per cent to 1.41 million, from 1.15 million a year ago.

In TBR, China's share is around 96 per cent and in PCR the share is nearly 45 per cent.

Apollo Tyres VC & MD Neeraj Kanwar had recently said that he is a bit "cautious" about Chinese imports that are coming into India and that it is a big problem that the industry faces as it is increasing month on month. He added that the government should put some duties on the imported tyres.

If Indian tyre companies are selling at a 100, Chinese tyres are coming in at 50, which is killing the Indian manufacturing industry, said Kanwar, adding that these imported tyres are not of the best quality, so safety is another issue that truckers and consumers are going to face.

"So, I think the government has to see that in order to create jobs, they have to give us some relief from Chinese imports...," he told the media recently.

Apollo Tyres Chief Financial Officer Gaurav Kumar said, "The area of concern for the Indian operations remains Chinese imports in the truck segment, which again saw a very sharp increase and on this front we are still waiting for action from the government. The truck radial imports from China forms a large chunk of the market currently."

He added that even on the radial side, bulk of the growth has been taken up by the Chinese, but the company did not feel that pressure because its facilities are pretty much operating at full capacity. But some of the other players would have felt that pressure.

The industry has been taking up the issue with the central government for over two years now. "No measures were taken to arrest the imports (Chinese) despite the fact that we have been asking for nearly two years. The positive sign is that the Centre started investigation, we are hopeful of getting a positive order," said the senior executive of a tyre company.

MRF Chairman and Managing Director K M Mammen said that the continuing import of cheap tyres from China, which undercut and depress local market tyre prices, remains a key issue for all Indian tyre majors.

So far, industry representations to the government urging it to consider levying an anti-dumping duty on Chinese imports, as was recently done by the US for its domestic market, has not been met with sympathetic consideration.

This sharp rise in Chinese imports, if continued, will lead to under-utilisation of TBR and also truck and bus bias capacities, said the company.

Raghupati Singhania, chairman and managing director of JK Tyre, recently said, "In the US, the process for anti-dumping laws gets completed in 45 days. But here, it has been 16 months and we are yet to see action on it."

"It is not that we are protectionist; we welcome competition. But we want that there should be control on dumping by Chinese companies, which are sold 25-30 per cent (price) less than the domestic manufacturers. Also, the quality of such tyres is poor, due to which even the customers suffer," he added.