India’s MMTC Closer to Chinese Tyre Imports

India’s state run MMTC trading company appears to be progressing with its plan to import and market Chinese commercial vehicle tyres in India. According to reports, the company has already identified a US-based tyre manufacturer with a production site in China as the possible source of tyre imports on an ongoing basis. The initial volume order is anticipated to be placed in September or October.

The US based company has not been specifically named, however sources say the firm first entered China in 2006 and recently acquired a production facility there. The company was incorporated in 2005 through a series of mergers and also has production bases in Europe and North America.

The company hopes to supply 10 to 15 per cent of the commercial vehicle replacement tyre segment in India. Contrary to established tyre importation practices in India, MMTC plans to market the tyres with a quality and service warranty such as those offered by domestic manufacturers. “Our marketing principles will be at par with that of the domestic players,” an MMTC source was quoted in India’s Business Line newspaper. The source added that MMTC would soon be appointing dealers.

MMTC is now working to secure deals with prospective purchasers. The company anticipates entering into supply agreements with large fleet operators, particularly state-run transport agencies. 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 added.

Company sources insist that the imports will be profitable even though India’s rupee has depreciated against the dollar. It is possible that MMTC may seek a cut in import duties.