The fall in rupee has made the import of radial tyres costlier. This in turn has made the local tyre industry to demand for a restriction on radial tyres, angering dealers in the process who say that the demand is “unfair and anti-consumer”.
“Chinese tyre manufacturers / exporters are not yielding to reflect the yuan depreciation in the price of truck and passenger car radials imported into India,” said S P Singh, convener, All India Tyre Dealers’ Federation (AITDF).
“The import of a pair of truck / bus radial tyre has effectively become costlier by Rs 700-Rs 800. Similarly, import of passenger car radial tyre is costlier by around 5% from China.”
Chinese currency yuan was devalued by 1.9% on August 11 2015 to be followed with another yuan depreciation of 1.3% more recently. Domestic tyre companies have been demanding restrictions on the import of truck, bus and passenger car radial tyres from China. Chinese imports have flooded the market due to the fact that import of raw material like rubber is now costlier than imported the finished product.
Tyre dealers have been rooting for imported products because they are cheaper and good quality. Local tyre companies have not been passing on the benefits of the drop in global commodity prices on to the end customer although all tyre companies hiked tyre prices when crude and rubber prices went up globally.
“Indian truck and bus radials and passenger car radial tyres are overpriced and are tracing stiff competition in terms of tyre performance from imported brands from China,” said Singh.
“In order to hoodwink the government and consumer, some of the leading domestic brands have brought about collective 1.5% – 2.5% price cut in last 7 days as against the huge buffer of 20%-30%. The balance sheets and financial performance of Apollo, JK, MRF and CEAT have phenomenal high profits till first quarter of current fiscal and last 3-4 years of their annual balance sheets.”