Smuggled Tyres Putting the Squeeze on Indonesian Manufacturers

Domestic tyre sales in the Indonesian market dropped four per cent during August, allegedly the result of a market saturated with cheaper tyres smuggled from China and India. According to Indonesian Tire Producers Association chairman Aziz Pane, illegal tyres have been entering the Indonesian market since July and are making life difficult for the producers of their local counterparts.

“Illegally imported tyres, in the hundreds of thousands, have partly taken over the domestic market,” Pane told the Jakarta Post. “Local tyre producers sold 3.7 million tires in August, down from 3.89 million in July.” According to the association, tyres produced in China and India are sold in Indonesia for between 10 to 30 per cent less than locally made tyres.

“The prices are lower because they don’t comply with national standards and don’t pay import taxes,” said Aziz. “Local producers will be dearly affected unless the government takes stern measures to curb smuggling.”

This drop of sales has been confirmed by the sales manager at one local producer, Endjang S. from PT Bridgestone Tire Indonesia. “Our company recorded a 20- to 30 per cent drop in sales in August,” he told the Jakarta Post, adding that around 22 producers were already experiencing an average decrease of 20 per cent.