Imports of Chinese tyres into India have surged over several months after the US imposed an anti-dumping duty on them.
A basic customs duty of 10 per cent has led to cheaper Chinese tyres flooding the Indian market.
Chinese tyre imports grew 31 per cent to Rs 613 crore crore by late 2014 from Rs 468 crore in 2012-13, industry data revealed. The value of Chinese tyre imports in 2014-15 may have reached Rs 800 crore.
This has added pressure on Indian tyre makers despite low prices of natural rubber over the last few months. Raw material cost as a percentage of sales has declined from 66 per cent to 57 per cent for MRF, India’s leading tyre maker.
“Recovery in demand from original equipment makers has been slow. The surge of cheaper Chinese imports is eating into the share of domestic tyre makers, including MRF, in the replacement market. We expect MRF to sustain itself against the Chinese imports and maintain a stable position in the replacement market owing to its diversified product mix and leading position,” said a report by Angel Broking.
In its pre-Budget submission, the Automotive Tyre Manufacturers’ Association (ATMA), said the total import duty on natural rubber was 20 per cent while tyres could be imported at five per cent duty and less under various trade agreements. Under the South Asian Free Trade Area agreement, tyres can be imported at 5 per cent duty from Pakistan and Sri Lanka.
The industry had sought higher import duties on tyres. The International Trade Advisory Services has said over 60 per cent truck and bus radial tyre imports are from China at an average price of $106, which is lower than the raw material price.
According to Raghupati Singhania, chairman of ATMA, imported tyres now constitute almost 20 per cent of the Indian market, with China being the largest supplier.
Indian tyre makers are expected to post flat top line growth in the fourth quarter of 2014-15 on weak growth in the passenger, tractor and two-wheeler segments, and due to competition from cheap Chinese imports.
A basic customs duty of 10 per cent has led to cheaper Chinese tyres flooding the Indian market.
Chinese tyre imports grew 31 per cent to Rs 613 crore crore by late 2014 from Rs 468 crore in 2012-13, industry data revealed. The value of Chinese tyre imports in 2014-15 may have reached Rs 800 crore.
This has added pressure on Indian tyre makers despite low prices of natural rubber over the last few months. Raw material cost as a percentage of sales has declined from 66 per cent to 57 per cent for MRF, India’s leading tyre maker.
“Recovery in demand from original equipment makers has been slow. The surge of cheaper Chinese imports is eating into the share of domestic tyre makers, including MRF, in the replacement market. We expect MRF to sustain itself against the Chinese imports and maintain a stable position in the replacement market owing to its diversified product mix and leading position,” said a report by Angel Broking.
In its pre-Budget submission, the Automotive Tyre Manufacturers’ Association (ATMA), said the total import duty on natural rubber was 20 per cent while tyres could be imported at five per cent duty and less under various trade agreements. Under the South Asian Free Trade Area agreement, tyres can be imported at 5 per cent duty from Pakistan and Sri Lanka.
The industry had sought higher import duties on tyres. The International Trade Advisory Services has said over 60 per cent truck and bus radial tyre imports are from China at an average price of $106, which is lower than the raw material price.
According to Raghupati Singhania, chairman of ATMA, imported tyres now constitute almost 20 per cent of the Indian market, with China being the largest supplier.
Indian tyre makers are expected to post flat top line growth in the fourth quarter of 2014-15 on weak growth in the passenger, tractor and two-wheeler segments, and due to competition from cheap Chinese imports.