The Hindu Business Line : MMTC keeps to plan of marketing Chinese commercial vehicle tyres

Kolkata, July 9 Notwithstanding the negative impact of a depreciating rupee, MMTC sticks to its plan of marketing Chinese commercial vehicle tyres — primarily radial tyres — in India.

The public sector trading major has already identified a US-based tyre maker having a production base in China as the possible source of imports on a long-term basis. The first bulk order is expected to be placed in September-October.

Plans on import of high tonnage OTR (off-the-road) tyres are yet to be firmed up due to an availability crisis. Such tyres are primarily used by the mining industry in earth-moving equipment.

According to sources, the Indian major is in advanced stage of negotiation with the US-based company — which had entered China in 2006 and has recently acquired a production facility in the country — and a formal agreement in this regard is expected shortly. The US company was incorporated in 2005 through a series of mergers. Apart from China. the company has production bases in North America and Europe.

warranty plus

Interestingly, contrary to existing marketing practices (of imported tyres), MMTC is planning to market the commercial vehicle tyres with warranty and (or) guarantee on quality and service, as is offered by the domestic manufacturers. The company is looking forward to cater to 10-15 per cent of the replacement demand for such tyres in India. It may be mentioned that out of approximately 35 of our existing importers, hardly 5-6 are currently offering service warranty on products.

“Our marketing principles will be at par with that of the domestic players,” an MMTC source told Business Line, adding that the company would soon be appointing dealers. Considering that commercial vehicle tyres are mostly sold through multi-brand dealers, MMTC might not take long to complete the process.

Also underway is the process of firming up deals with prospective buyers. The company is looking forward to enter supply agreements with a large fleet of owners, especially State-run transport agencies. “We have located a few buyers. Agreements will be in place once the supply source is firmed up,” the source said. Interestingly, while MMTC sources insist that the imports will be profitable even in a scenario when the rupee is depreciating against the dollar, industry sources say that the company may be looking forward to a cut in import duties or anti-dumping.

In a recent submission before the Government, the trading lobby urged for a friendlier import duty regime to enhance competition in the India tyre market, which had witnessed a series of price hikes by domestic manufacturers. The pro-imports lobby feels that such measures may help keep a check on spiralling road transport cost.

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