| Subject: |
Tyre manufacturers fear a surge in imports on falling yuan |
|
KOCHI: For India's tyre manufacturers, the Chinese currency's devaluation has come as a double whammy of sorts.
Already hurt by increasing imports of Chinese tyres in a sluggish market, they fear a cheaper yuan would further boost supplies from the neighbouring country.
The industry expects imports to go up significantly from this month onwards.
The share of China in imported tyres has gone up to 90% from 48% in the past three years, according to the Automotive Tyre Manufacturers' Association (ATMA).
"The depreciation of yuan could not have come at a worse time," said Onkar S Kanwar, chairman of Apollo Tyres. Imports of Chinese tyres increased 24% last financial year and in the April-June quarter, truck tyre imports rose nearly 75% from a year earlier, he said.
"In the relevant truck-bus radial segment, the low-cost Chinese tyres have grabbed over 10% of the replacement market, and this is likely to increase in the future due to further yuan devaluation."
India, along with the US and Europe, are the top three markets that China is targeting for tyre exports.
China has built huge capacities, which were facing a shutdown due to a recession in the automobile market.
To keep the plants running, the country is trying to export more tyres. The currency devaluation is expected to help as it has made Chinese products cheaper in international markets.
"The US has imposed anti-dumping and countervailing duties on Chinese tyre imports to offset countervailing subsidies received by certain tyre segments in China," said ATMA director-general Rajiv Budhraja. Chinese tyres consist mostly of truck and bus radials, a segment which is fast developing in India, he added.
"It is not confined to metros. These tyres are available pan India and they are 25-30% cheaper than locally produced tyres," said Vikram Malhotra, vice-president, marketing and sales, JK Tyres.
The import duty on tyres averages between 6.5% and 8%, but that on natural rubber, a principal raw material for tyre makers, is 25% after a recent increase.
This, tyre companies say, has created an unfavourable environment for them. Given the situation, tyre makers are likely to become more vociferous.
Source : economictimes.indiatimes.com
|