Import Tariffs
Brazil’s Chamber of Commerce (Camex) has reviewed and extended its anti-dumping duties on passenger car tyres manufactured in China. In late July it published a list of duties to be charged on tyres covered by Mercosul Common Nomenclature (NCM) 4011.10.00, specifically new 65 and 70 series, 13 and 14-inch rim diameter passenger car radials.
With the ink still drying on Apollo Tyre’s agreement to purchase Cooper Tire and Rubber, on 27 June Tyres & Accessories met with Apollo vice chairman and managing director Neeraj Kanwar at the company's new global marketing office in central London in order to get the inside line on the deal, the impending integration and the strategy behind the purchase.
In 2010, Apollo's owners, chairman Onkar Kanwar and vice-chairman and managing director Neeraj Kanwar, told the world that the company was aiming to break into the global top 10…at least. At the time this announcement was made you could be forgiven for thinking such a proclamation was either an exercise in hyperbole or in corporate goal setting. And why not? There's nothing wrong with aiming high, as many of the world's fastest growing tyre companies are clearly doing. After all, as the saying goes, “he who aims at nothing hits it”.
But with all the speculation that surrounded the company's decision to engage in takeover talks with Cooper at the end of 2012, the fact that the deal has now been agreed arguably isn't as much of a surprise as the speed with which the top 10 goal has been attained. Early indications suggest that the amalgamated Apollo/Cooper will be the seventh largest tyre company on earth. So what’s next? The exclusive club that is dominated and fiercely defended by the big five? Or, as is more likely, a period of integration and consolidation while the dust settles?
A report in French financial magazine Les Echos suggests that the Chinese Government is considering imposing an additional tariff on cars imported from the EU. The report was picked up by analysts Morgan Stanley, who suggest that the new tariff could be in response to the recently-announced 11 per cent tariff by the EU on Chinese-made solar panels. ACEA, the EU car association, says that the car tariff could be in place as early as September.
Sales of non-ETRMA member produced tyres are now at record levels. That’s what the latest data published by the ETRMA in its 2012 Statistic Booklet clear shows, based on full year 2011 figures.
The latest figures from the US light vehicle replacement tyre wholesale markets suggest shipments declined 1.9 per cent in August, according to the RMA. However, financial analysts from Deutsche Bank believe there are “several factors contributing to temporary weakness in the market” and that wholesalers are currently inclined towards de-stocking (due to recent raw material cost declines, and the nearing end of Chinese tyre import tariffs. As a result many anticipate lower prices in the months ahead.
When Reifen China opens the doors to the Shanghai New International Exhibition Center for the show between 14 and 16 November 2012, it will mark the sixth time that international tyre trade event has been held. And it comes at a good time for European buyers looking to connect with Chinese manufacturers as it is set against a backdrop of continuously increasing capacity and the relaxation of import tariffs against Chinese passenger car tyres bound for America.
The US House of Representatives has joined the Senate in passing new legislation that would allow the government to impose higher tariffs on goods from state-controlled economies that subsidise exports to the US, reports Tire Review. The journal says the legislation targets the tyre industry in particular, and was drafted and presented in reaction to the December 2011 federal appeals court ruling that the Commerce Department did not have the power to levy so-called punitive countervailing duties, effectively tossing out a series of duties – some as high as 210 per cent – it placed on China-produced OTR and agricultural tyres imported into the US.
Just under a year before its mandatory introduction, the European Commission has published its second regulation (1235/2011) paving the way for the implementation of tyre labelling requirements. Regulation 1222/2009 introduces labelling requirements detailing the display of information on fuel efficiency, wet grip and external rolling noise of tyres. According to the ETRMA, which has been involved in consultation on the legislation, the regulation aims to “increase the safety and the environmental and economic efficiency of road transport by promoting fuel-efficient and safe tyres with low noise levels.”
The shuttered Cooper Tire & Rubber Co. tyre plant in Albany, Georgia, has been sold to an Illinois developer, according to Tire Review. No details of how much was paid have yet been released.
Analysts believe that China’s tyre industry will face a severe test in the second half of this year. According to the China Rubber Industry Association (CRIA) statistics, in the first six months of 2011 member companies’ tyre production totalled 128 million units, of which 107 million were radial tyres. This represents year-on-year growth of 1.6 […]
Shares in Cooper Tire & Rubber Company hit a new 52-week low on Monday 12 September trading at $10.36, below the previous 52-week low of $10.50. According to a report at thestreet.com, Cooper Tire & Rubber has a market capitalisation of $696 million and shares were down 53.6 per cent year-to-date at the close of trading on Friday 9 September.
The World Trade Organization (WTO) has upheld the US government’s decision to impose 35 per cent import tariffs on Chinese produced passenger car tyres in September 2009. Two years later these have been lowered to 25 per cent, as initially planned. However, the Chinese authorities maintain that the original ruling has seriously harmed Chinese producers and the decision to uphold it will “intensify their difficulties.”
The second quarter was tough, but look out for a rebound in the second half of 2011. That’s the view of Morgan Stanley analysts with reference to Cooper Tire’s dramatic recent share performance. Reducing the company’s price target from $30.00 to $27.00, the company re-iterated our overweight rating saying the tyre manufacturer shares offer “compelling value following [the] recent [stock] sell-off.”
Leading Chinese tyre manufacturer Hangzhou Zhongce Rubber has confirmed that it is planning to build a tyre factory in the vicinity of Bangkok, Thailand. Speaking to Tyres & Accessories, the executive responsible for the company’s Westlake brand Mr Ge, confirmed that the company had signed a contract with the Thai government to purchase land in the Bangkok development zone.
The United Steelworkers has described a decision made by the Appeals body of the World Trade Organization as “a slap in the face to US workers and industries that are harmed by China's predatory trade practices.” The decision reverses the findings of a WTO panel report from last year on anti-dumping and countervailing duty proceedings for off-road tyres and a number of other products from China; specifically, the WTO states the US Department of Commerce acted erroneously by simultaneous levying both anti-dumping and countervailing duties on these products.
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