Financial Daily from THE HINDU group of publications
Monday, Apr 17, 2006
Financial Daily from THE HINDU group of publications Monday, Apr 17, 2006 |
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Corporate - Corporate Disputes Tata Motors in tangle with OE tyre suppliers Pratim Ranjan Bose
Roll on roll off Tyre manufacturers are resorting to tactics such as throttling of supplies to achieve the pricing objectives. Even with consistent increase in prices, supplies have been inconsistent.
Kolkata , April 16 The investigation over the alleged dumping of cross-ply truck and bus tyres by China and Thailand has led to Tata Motors' face-off with one of its major original equipment tyre suppliers, Ceat Ltd. To illustrate its problems with tyre suppliers, Tata Motors has, in its submission before the designated authority in the Commerce Ministry, drawn attention to its problems with Ceat. It has alleged that Ceat has throttled supplies in order to achieve its pricing objectives. The auto major was opposing the petition from the Automotive Tyre Manufacturers Association (ATMA), Apollo Tyres and Ceat demanding imposition of anti-dumping duty. In a communication dated January 30, Mr A.S. Puri, DGM (Government Affairs and Collaborations) of Tata Motors has said: "It is increasingly observed that tyre manufacturers are resorting to tactics such as throttling of supplies to OEMs (auto-makers) at critical junctures, in order to achieve the pricing objectives. Even with consistent increase in prices, supplies have been inconsistent. To illustrate the case, supplies from Ceat Ltd, have been extremely erratic and varied from 4,850 to 29,664 per month between April 2004 and December 2005." The communication provides details of monthly supplies from Ceat during the period. Ceat, however, did not respond to queries from Business Line on the issue . Talking on behalf of the tyre industry, Mr D. Ravindran, Director General of ATMA, told Business Line that OE supplies fetch a lower price than the replacement market. "The tyre manufacturers are witnessing unprecedented cost-push. It is comparatively easier to revise prices in the replacement market than the OE segment where prices are negotiated in nature." Stating that while the OE segment constitutes just 10 per cent of over 110 lakh truck and bus tyres, Mr Ravindran said it holds importance in view of brand recall in the replacement market.
More Stories on : HCV/LCV/Tractors | Corporate Disputes | Regulatory Bodies & Rulings | Tyres | Tata Motors Ltd
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