Other vehicle manufacturers may follow suit

Pratim Ranjan Bose
M.R. Subramani

China syndrome

Tata Motors

has placed orders for close to five lakh truck-bus tyres with its Chinese suppliers.

Chinese radials

may become cheaper by at least Rs 600 a pair due to reduction in import duty announced in the Budget

Kolkata/ChennaiMarch 4Tata Motors is likely to roll out its buses and multi-axle trucks with Chinese radial tyres.

"Tatas are bringing in Chinese tyres duty-free under open general licence against export of automotives," said a tyre industry official.

According to industry sources, Tata Motors has placed orders for close to five lakh truck-bus tyres (including both radial and cross-ply) for original equipment requirement with its Chinese suppliers. The tyres will come into the country over the next 12 months.

"Other vehicle manufacturers are also looking to import Chinese tyres. It is a threat for real and the tyre industry has to live with it," the official said.

Tata Motors will also import a smaller percentage of Chinese cross-ply tyres.

Tyre Requirement

When contacted, a Tata Motors official declined to comment on the issue.

Sources, however, revealed that the company had been exploring the possibilities to meet its tyre requirement from China since last year. Discussions were also held with Indian Foundation of Transport Research and Training on the performance of Chinese tyres.

Accordingly, Tata Motors visited several tyre facilities in China and short-listed three manufacturers depending upon the test performance. However, the imports are unlikely to affect the tyre manufacturers.

"Actually, the manufacturers sell tyres to original equipment manufacturers at a loss. Chinese tyres are about 10 per cent lower in the replacement market compared with Indian ones," the official said.

Radial Varieties

According to the All-India Tyre Dealers Federation, quality Chinese truck-bus radials are available in the replacement market in India at Rs 21,000 a pair.

The price of Chinese cross-ply rear (Lug) tyres costs Rs 17,000 a pair.

On the other hand, India made radials cost approximately Rs 28,000. Imported radial varieties now marketed by global majors Michelin and Bridgestone cost roughly Rs 30,000 a pair.

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(This article was published in the Business Line print edition dated March 5, 2007)
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