Now one of the largest tyre-producing countries in the world, China has an indisputable influence on the direction of global tyre trade. The home of both fast-growing up-and-coming brands as well as a burgeoning domestic market, this tag chronicles China’s involvement with the tyre business.
Tire Review/Reuters – Trade measures of the type imposed by the United States on Chinese tires run the risk of spilling over and slowing economic recovery, a senior World Trade Organization (WTO) official said on Thursday. The tyre trade dispute blew up between the United States and China after Washington imposed additional duties on Chinese-made tyres last Friday, accusing Beijing of flooding the US market.
Tire Review has compiled a variety of news stories based around the introduction of tariffs on imported China-made passenger tyres. Here is a sampling of the most relevant items from the past day:
Pirelli Tyre has reportedly signed a memorandum of understanding with Hixih Group to build a new filter plant in Yanzhou Shandong province. The new plant will be located near its existing tyre plants that were jointly established by the two companies. Construction for the new 50 million euro plant is expected to start in the first quarter of 2010. (Tire Review)
Though silent while the government mulled over the USW’s Section 421 complaint about China-made passenger tyres, both Bridgestone Americas and Goodyear issued statements regarding the Obama Administration’s decision to levy a three-year tariff on the imported tyres.
With an ever-growing awareness of the ecological climate, as well as a new precedent currently being set for economical measures introduced specifically for levies on manufacturers of tyres in the Far East, those wishing to import tyres to Europe and the USA need show an awareness of current regulations governing the properties of their products. This has not passed Federal Corporation by: “In an effort to contribute to the conservation of the environment and demonstrate our ongoing commitment to a safer and greener society,” Federal announces it is “to phase out use of the PAH rich extender oils by shifting all categories of tire segments to HA oil free tires following the REACH regulations.” The implementation of the environmental initiative, the company continues, is in compliance with EU directives concerning the tyre industry and is clearly designed to show how the Far East is by no means standing still when it comes to the use of new technologies to meet EU regulations.
ExxonMobil Chemical will host Tire Symposium 2009 in Chengdu, China, for those interested in learning about new tyre innerliner technologies and opportunities for the Chinese tyre industry. The 18-20 October event is sponsored exclusively by ExxonMobil Chemical, and will feature product marketing and technology specialists discussing tyre innerliner technologies, including the company’s own Exxcore DVA resin-based innerliner.
The Tire Industry Association said it is “deeply disappointed” in the Obama Administration’s decision to place added tariffs on imported China-made passenger tyres. The association, which made no prior public statements regarding the situation, issued a statement yesterday calling the decision “politically motivated.”
The Obama administration’s announcement that it is to impose tariffs of up to 35 per cent on Chinese-manufactured imports had a large impact on daily trading in the USA and Seoul, as Goodyear and Cooper shares bumped, and Hankook stock floundered.
President Barack Obama’s decision to apply a 35 per cent import duty on all passenger car and light truck tyres from China for a period of three years may have been intended to “remedy market disruption caused by a surge in [Chinese] tyre imports” into the US, but it has also provoked a sharp response from the Chinese ministry of commerce and played havoc with the share prices of Far Eastern tyre manufacturers. China’s state media said the US import duties would cost 100,000 jobs and $1 billion (£600 million).
Announcing the decision (on Friday 11 September 2009), the White House explained that the 35 per cent ad valorem levy would be placed in addition to the existing 4 per cent import duty on imports of Chinese-product passenger car and light truck tyres. The duty will reduce to 30 per cent ad valorem in the second year, and 25 per cent ad valorem the third year. The US International Trade Commission had recommended a 55 per cent tariff in the first year, 45 per cent in the second year and 35 per cent in the third year.
Georg Schramm, head of marketing and sales for Apollo Tyres South Africa (Pty) Limited, will be a keynote speaker at the inaugural Tyrexpo Africa Conference alongside next March’s Tyrexpo Africa’10. Schramm is responsible for all marketing and sales for the Dunlop brand in South Africa as well as Botswana, Namibia, Lesotho and Swaziland. He will provide an expert insight into tyre manufacturing in the African market.
He will be joined at the conference by Dr Etienne Human, chief executive officer of SATRP, the South Africa Tyre Recycling Program. Dr Human will outline the work and remit of the not-for-profit organisation that was established to tackle the waste tyre problem in South Africa and support a sustainable waste tyre producer industry. Members of the body include Bridgestone, Continental, Dunlop and Goodyear, Michelin, Pirelli, Maxiprest and Trentyre.
The Brazilian Chamber of Foreign Commerce has imposed an additional tax of US$ 0.75 on each kilo of tyres imported from China. The decision was taken, says the CFC, as an anti-dumping measure to protect domestic markets and the new tax will come into force immediately. However, it could have been worse; at the same meeting the CFC also imposed a levy of US$ 12.47 on each pair of shoes imported from China.
At the start of 2009, the Chinese Rubber Industry Association reported that, despite the global economic meltdown, China remains the world's fastest growing market. The Chinese tyre business is reportedly worth about $8 billion and accounts for 9 per cent of the world tyre market share. However with most of the world’s markets either struggling to recover or still nose-diving, the fact that July figures suggest Chinese passenger car tyre OE and replacement demand are actually up 10 and 20 per cent respectively is truly impressive. With this in mind, Messe Essen’s third Reifen China exhibition running from 11 – 13 November is likely to pique the interest of buyers, manufacturers and traders from around the world.
This morning the 7th China International Tire Expo (CITEXPO) opened in Shanghai. This year’s event has played host to more than 300 companies in the domestic and international tyre trade. The organisers, Reliable International Exhibition Services, don’t anticipate this year’s event will set a new attendance record, with visitors from the US particularly lacking as a result of the threat of punitive tariffs market for importing Chinese products into the American market. Nevertheless, they are confident the show, running through till Friday, will be a success. Tyres & Accessories/tyrepress.com (along with sister publication Neue Reifenzeitung) is represented with a stand at the exhibition. A detailed report on this leading Chinese tyre trade fair and its exhibitors will follow shortly.
Emilio Bolla has been appointed general manager of Marangoni Group’s Shanghai branch. Marcello Gambarini, who held this position throughout the company’s initial exploration, will now return to Italy, where he will continue to supervise activities in China and follow the group’s development in Asia. According to a company statement, Bolla previously worked as a project product manager, a sales & marketing manager and as a general manager, acquiring “profound knowledge of the Chinese market.”
The recent labour dispute Kumho Tire in South Korea ended peacefully after “marathon” talks concluded peacefully on Saturday 5 September at 21:00. At the conclusion of the negotiations, local newspapers report that union workers agreed not to receive 2008 bonuses and to negotiate 2009 bonuses in the first quarter of 2010. As a result of the mutual agreement, Jooang Daily reported that Kumho management’s called off previously announced layoffs – a fact emphasized union sources. It is not clear if this means all 733 workers who were to be laid off on 24 August will now be able to work again.
Jooang quoted Kumho Tire as saying that the average annual salary of the 4,200 employees who work the company’s production line is 70 million won ($56,600). The company also said more than 30 per cent of workers receive an annual paycheck of more than 80 million won.
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