The Hindu Business Line : Tyre dealers oppose move for dumping duty on imports from China, Thailand

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.