Imports
Indonesian tyre exports hold a market share of around 30 per cent in Egypt, and according to the Jakarta Post, tyre makers have retained their confidence about this market despite the announcement of plans late last year to refurbish an idle plant their and turn it into the Middle East’s largest tyre manufacturer.
The United Steelworkers of America says it has “complete faith” that the World Trade Organization will uphold the US government’s imposition of an added tariff to consumer tyres imported from China. The WTO has acted on an appeal from China to investigate the three-year, tiered added tariffs imposed on China-made consumer tyres last September. The tariffs – 35 per cent for the first year, 30 per cent the second, and 25 per cent for the third – came on top of an existing four per cent standard import tariff.
Malaysia’s national news agency reports that as of next year permits will be required for the importation of regrooved tyres. According to Bernama, Deputy Transport minister Datuk Abdul Rahim Bakri said this change was occurring to ensure imported regrooved tyres were safe for use in Malaysia. "The ministry has made new legal provisions for motor vehicles which will be gazetted and implemented in 2010 to control the entry of regrooved tyres from other countries," he said.
Euro Car Parts (ECP) says that it will strive to meet motorists demands with its high quality Teco brand tyre changers. It states that with the ever increasing demand for improved workshop safety and the ability to handle bigger and more varied tyre/wheel packages, the demands on tyre changing equipment to meet a number of criteria has never been higher. Euro Garage Solutions (EGS), the Garage Equipment Specialist Division, of Euro Car Parts Ltd is confident that its Teco brand of tyre changers is more than capable of meeting the workshops current and future demands. In consumables, the distributor has announced that it will supply Bosch’s recently launched new range of garage equipment ‘Around the Wheel’ products. The company, which calls itself “the UK’s leading aftermarket parts supplier”, also stocks a comprehensive range of tyre repair materials from Rema Tip Top, launched a new extended range of SNR wheel bearing kits adding nearly 1,000 existing references in September and becomes “the first in the UK to sell the Koyo Hub Bearings in a branded Koyo box”, with its Japanese OEM timing belt tensioner/idler and Wheel Bearing Range extension.
Tyre manufacturers in the US are likely to follow Goodyear in raising prices to offset tariffs on Chinese made tyres and rising raw material costs. This is the opinion disseminated by Associated Press, which reports KeyBanc analyst Saul Ludwig’s view that prices will be up some five to ten per cent by January. Goodyear, which will increase consumer replacement market prices by six per cent in December, imports around two per cent of its tyres from China. Its price increase, thus, could offset the extra costs.
The solitary remaining tyre manufacturer in Zimbabwe marked its 50th Anniversary on November 18, and company management have taken the opportunity to express their optimism for the future. At an event held by Dunlop Zimbabwe and attended by numerous dignitaries, company chairman Dr Luis Cenevis stated that the tyre maker had managed to survive the previous years’ trials and was looking forward to production levels returning to full capacity.
Imports of truck and bus tyres into India have risen sharply since may in spite of government restrictions. The Automotive Tyre Manufacturers Association (ATMA) reports 138,347 truck and bus tyres entered the country in August, up from 20,222 units in April. The majority of these were produced in China, the organisation adds – imports from China reached 100,772 units in August, a dramatic increase on the 9,594 tyres imported in April.
China is the world’s largest consumer of rubber, and growth in the use of compound rubber – a substance containing 99 per cent natural rubber but attracting 15 per cent less tax than its pure 100 per cent counterpart – is colossal. This year the country is expected to import 950,000 tons of compound rubber, a leap of almost 71 per cent from last year. Many rubber exporters in Thailand, Indonesia and Malaysia are now focusing on producing compound rubber more to take advantage of China's import duty structure. "Compound rubber import volume was increasing in recent years because the customs tax was lower than [for] natural rubber," the China Rubber Research Institute said in a report prepared for an international conference in Vietnam.
Pierre Cohade, president of Goodyear Tire & Rubber Co.’s Asia-Pacific business, recently asked if we should move away from talking about BRIC countries (the emerging markets of Brazil, Russia, India and China) and instead focus on BIIC. Posting this poser on the popular Twitter social network (follow twitter.com/tyrepress for regular tyre industry updates) from his base in Shanghai, Cohade questioned whether Russia’s position as leading light in the global economy should be replaced with Indonesia which, in his words “continues its spectacular improvements.” He’s got a point.
The Rubber Manufacturers Association projects an approximately 13 per cent decline in US tyre shipments will occur in 2009, principally as a result of a sharp decrease in demand for original equipment passenger car and commercial vehicle tyres. Total tyre shipments are anticipated to reduce by approximately 36 million units to 246 million. The RMA notes this decrease reflects the “difficult economic environment for automotive manufacturers over the past year, continued low consumer confidence and high unemployment.” This year’s projected total shipments represents a 23.4 per cent decrease on the peak of 321 million units reached in 2000.
On 15 October EU Trade Commissioner Catherine Ashton and Korean Trade Minister Kim Jong-hoon initialled a free trade agreement (FTA), which the EU calls “the most important ever negotiated between the European Union and a third country.” Estimated to be worth a total of 19 billion euros in new trade for EU exporters, the agreement is designed to remove virtually all tariffs between the two economies.
However, it is a bilateral deal. And European carmakers, apparently fearful of being swamped by imports of more economically priced Korean cars in an already depressed market, were the first to call for a rethink through industry body ACEA. However this appears to have been too little too late and according to the commission, the initialling signals the end of negotiations. The current “stable legal text” will be formally presented to EU Member States in early 2010. So what does this mean for the European tyre (and associated product) markets?
With the Russian economy fairing worst that most at the moment, the tyre business in this part of the world has taken a similarly significant hit, with both imports and exports falling heavily in the first half of 2009. Tyre manufacturers appear to have been offering significant discounts (or exporting lower value items) in the first half of 2009 with unit export figures falling far slower than export values. Data compiled by the Russian Discovery Research Group shows exports totalled 3,259,440 units in the first half of 2009, down 8.6 per cent from 3,566,469 units in the first half of 2008. Meanwhile, passenger-car tyre exports fell 7.1 per cent in the period, with truck tyre exports down 14.9 per cent. Exports of light truck tyres countered the trend, growing 40 per cent.
Micheldever Tyres has appointed logistics services provider Wincanton Plc to set up a direct import and trunking solution for the business. This arrangement will see a portion of an existing Wincanton site in Kettering, Northamptonshire set aside as a ‘direct import centre’ for Micheldever. From here more than 50,000 tyres will be shipped to wholesale distribution centres throughout the UK, which in turn will supply 22 per cent of the national tyre market. According to Wincanton, the new solution will reduce lead-times onto site following arrival at the port plus reduce product movement and handling across the network.
China’s Commerce Ministry has labelled US measures against Chinese imports, such as the tariffs on consumer tyres, as “groundless”. On October 15 ministry spokesman Yao Jian told journalists "the US launched a large number of trade remedy measures this year. Quite a few such measures were groundless and wrong."
In the US, Pirellli is raising the prices of its US P4 Four Seasons and Cinturato P5 tyres by 10 per cent, effective 1 November 2009. According to the company, the move is a result of “market pressures created by the recent tariff on Chinese consumer tyre imports” as well as increased rubber and raw material costs.
Pirelli Tire North America’s price increase is the first move from the premium sector in response to the recent Chinese import tariff and suggests that, directly or indirectly, the tariff has an effect throughout the market. Pirelli previously said that only very small shipments of certain specific products would be direcly affected by the tariff and that its influence was “not material.”
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