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Ruling Requires Manufacturers to Prove Harm from Imports

A federal trade panel ruling in the US has provided a glimmer of hope for Chinese tyre manufacturers facing the prospect of tariffs imposed upon their products. On November 20 the United States International Trade Commission ruled against the American glossy paper industry’s request for tariffs on paper imported from China, discarding duties that the US government had authorised earlier in the year. The ruling stated that US makers of glossy or coated paper had not been “materially injured” or “threatened with material injury” by the subsidised Chinese products entering the market.

However the ruling did not dispute that the Chinese government’s programme of subsidising of products destined for export may be improper or illegal, therefore the door remains open for US tyre manufacturers, amongst others, to seek relief through the imposition of tariffs. Government policy introduced in March, allowing for potentially crippling tariffs on Chinese manufactured goods on the premise that China illegally subsidises some of its exports, also remains in operation.

21st November 2007/by Tyrepress Editors

EU Requirements for Tyres Will Reduce Safety, says Conti

By means of various regulations, the EU intends to reduce both CO2 emissions and noise pollution from road traffic in the future. Also under discussion in conjunction is an “environmental label” aimed at informing consumers about tyre rolling resistance, as is a new requirement for reducing tyre/road noise. However Continental has voiced its concerns that the realisation of both targets in the scope envisioned by the EU would entail considerably compromising a tyre’s performance in terms of road safety.

“We, too, are very much endeavoured to effecting a continued and sustained improvement in the environmental compatibility of our products. Nonetheless, we explicitly advise against any one-sided approach at the expense of safety,” said Manfred Wennemer, Executive Board chairman of Continental AG. “A good tyre has to be balanced, that is, alongside other properties it must also offer the lowest possible rolling resistance and, at the same time, good braking properties. Anything else would represent a marked setback in terms of road safety. Not only motorists but also kids out at play, pedestrians and cyclists would also suffer in this case. What is more, a development in this direction would run counter to the European Road Safety Charter, in which the EU has committed itself to halving the number of traffic fatalities to 25,000 by 2010. That should, however, remain the overriding objective.”

13th November 2007/by Tyrepress Editors

Ceat Outsourcing up 25% in Q3

Outsourcing is becoming an ever-larger focus for Ceat, India’s fourth-largest tyre manufacturer. Following the announcement of the company’s July-September results chief financial officer K J Roa reported that, of the 44,000 tonnes of tyres sold during the quarter, up to 10,000 tonnes were sourced from contract manufacturers, including overseas based companies. Compared with the corresponding quarter of 2006, outsourcing grew by 25 per cent whilst overall volumes increased by just 7 per cent year-on-year.

In addition to tyres imported under an agreement signed with Pirelli, Ceat has outsourced production for a number of low-margin items such as tubes, slabs, and tyres for two and three wheeled vehicles. Due to production restraints the manufacturer also currently imports a number of PCR and TBR tyres. In future, said Rao, China will take on an important role as an outsourcing location for the Indian company. Currently a number of products are undergoing testing, and over the next two months volumes from China could rise.

8th November 2007/by Tyrepress Editors

High Mileage Not a “Supreme Importance” for Winter Tyres, says Conti

Rating winter tyres according to just one criterion fails to take account of the many demands placed upon them, claim experts working with Continental Tyres. They report, for example, that mileage performance on its own cannot be considered to be of “supreme importance” for a winter tyre. Rather, a high level of grip on both wet and dry roads and in typical winter weather conditions – features that require a softer and therefore faster wearing compound – should be given higher priority.

“What makes a really good winter tyre is having a well-balanced design incorporating a wide range of driving characteristics,” explained Alexander Lührs, press officer at Continental. “And here what counts is not achieving outstanding performance in one or the other discipline, but rather offering a design that is as balanced as possible, so that overall its characteristics meet the highest demands.” Above all, a tyre needs to provide good driving characteristics in typical winter weather conditions, including effective aquaplaning prevention and short braking distances in the wet.

7th November 2007/by Tyrepress Editors

Rubber Prices Set To Rise Sharply

A statement from Jom Jacob, senior economist of the Association of Natural Rubber Producing Countries, warns that increased demand for natural rubber – demand which producers are struggling to fulfill, will inevitably lead to spiralling rubber prices. Factors such as erratic weather, lack of cultivatable land and labour supply constraints could all adversely affect output in the main producing countries of Thailand, Indonesia and Malaysia.

International prices have risen four-fold since 2001, when there was over-supply and the price was at a 30-year low. Some analysts say they expect rubber to rise around 18 per cent to $3 a kg next year. Thai RSS3 grade, often used as the benchmark for physical prices, stood at USD2.55 a kg on Friday.

5th November 2007/by Tyrepress Editors

Retreaders Work on Their Contacts in Singapore

Tyrexpo Asia is not only a very interesting show for wholesalers, dealers and manufacturers of new tyres. In parallel with the increasing “Westernisation” of many markets in the region, suppliers of treads and tread rubber as well as equipment for the retreading business play an increasingly important role for Tyrexpo Asia, and this has not only been the case for this year’s show. Despite this, it has to be admitted that in previous years more companies from the retreading industry were present during the Singapore show, such as, for example, Goodway from Malaysia or Vipal from Brazil. So, this year’s exhibition appeared to lack some important market players. However, many others, including several companies from Europe and Northern America came or returned to exhibit at Tyrexpo Asia and thus benefited from it.

29th October 2007/by Tyrepress Editors

MRF Considers China Operations

India’s largest tyre manufacturer, MRF Ltd, has achieved a fiscal milestone and, at the same time, spoken afresh of plans to circumvent the country’s ‘inverted’ duty structure for tyres and raw materials.

The company’s chairman, K.M. Mammen, told media in Chennai on October 5 that MRF had, in the 2006-7 financial year, become a Rs 50 billion (£620.4 million) company, with turnover in the recently closed financial year up from Rs 42.6 billion (£528.6 million) during the previous year. The company added that profit is expected to be about 1.8 per cent of turnover, some Rs 900 million (£11.2 million).

Almost 20 per cent of turnover reportedly came from OEM sales. A further 10 per cent was garnered from exports and 2 per cent from sales to India’s military. The remainder came from the Indian replacement market, a £2.4 billion market of which Mr. Mammen claims MRF holds a 26 per cent share.

8th October 2007/by Tyrepress Editors

Indian Domestic Manufacturers Hit by Strong Rupee

The growing strength of the Indian rupee against the US dollar has been squeezing the export margins of tyremakers in the subcontinent for some time. A more recent development, however, is the strain India’s increasingly robust currency is placing on companies producing tyres for the domestic market.

Imports have become cheaper with each rise in the rupee, and those domestic market products with cut-price overseas equivalents have struggled to remain competitive. This phenomenon is not restricted to the tyre industry; the Hindu Business Line reports that a number of manufacturing sectors, including chemicals, textiles and automotive components, have been affected.

The Indian financial daily quoted Ashish Bharat Ram, managing director of SRF Ltd, as saying, “the rupee appreciation is adversely impacting those domestic manufacturers where the product is substitutable by imports.” This even applies to imported raw materials. “Imports of raw material from China, for instance, are of special concern as the yuan has not been revalued, and this puts pressure on margins even further.”

3rd October 2007/by Tyrepress Editors

Imported Truck Tyres Gain Speed in Canada

Use of imported Chinese tyres on the increase in Canada. A recent survey of fleet managers conducted by Truck News found that 18 per cent of managers said their fleets had experimented with far eastern imported brands. The same was true of owner/operators.

However, customer perceptions of Double Coin, Triangle, Woosung, Double Diamond and Aeolus tyres are reportedly still low. Owner/operators were most generous in their praise, rating them as 1.9 out of five. Fleets on the other hand scored the products as 1.65.

27th September 2007/by Tyrepress Editors

Cheap Chinese Imports Worry Indian Tyremakers

(Akron/Tire Review – India Business Standard) With the Indian tyre market being flooded with cheaper Chinese bus and truck tyres, the domestic tyre industry is up in arms about the under-invoicing of these imports and their inferior quality.

25th September 2007/by Tyrepress Editors

Lines of Distinction?

(Akron/Tire Review) Our industry – at home and abroad – has been building tires for more than a century. Along the way, we allowed ourselves to be fooled every once in a while by ‘technology’ that really didn’t live up to its billing. One example is the single-ply tire promoted as being as strong as a two-ply tire.

Great progress has been made, both in technology and in marketing. Let there be no doubt about the safety advances built into today’s tyres compared to those built in 1908. And, yes, there have been some stinkers along the way, but by and large, this industry has led the world in packing more performance and safety into one single product than any other.

If anything remains unchanged, it continues to be our penchant for putting an acronym or label on everything, the latest being the so-called “global tyre,” which doesn’t sound half as meaningful as the phrase it replaced – “world-class tyre.”

10th September 2007/by Tyrepress Editors

Fickle Power Supply, Importers Blamed for Dunlop Nigeria’s Woes

The Chairman of Dunlop Nigeria Jabez Lawuyi chose the company’s September 4 Annual General Meeting as the occasion to announce that the country’s chronically unreliable energy supply has reduced the tyremaker’s production and sales capacity by 20 per cent during the first half of 2007.

Nigeria’s unreliable electricity supply prompted Dunlop Nigeria to set up the means to operate using natural gas power several years ago. However, Mr. Lawuyi reported that this alternate source of power has proven to be no more reliable. “The supply of electricity has remained epileptic while that of gas has deteriorated significantly that together has led to a 20 per cent loss in the volume of production and sales of tyres in the first half of the year,” Lawuyi said.

Mr. Lawuyi also used the AGM as a platform to hit out at tyre importers, whom he accused of manipulating import tariffs in order to flood the local market with “substandard and under-priced tyres,” a practice he believes contributed to the closure of Michelin’s Nigerian operations in January. It was also his duty to inform shareholders than the company has achieved an annual turnover of N5 billion (£20 million) and a pre-tax loss of N370 million (£1.5 million).

6th September 2007/by Tyrepress Editors

Indian Tyremakers Lobby Govt to Certify Tyre Imports

In a move that echoes events taking place in the US, India’s government has listened to demands from local tyremakers to only permit ‘certified’ tyres to be imported into the country, and is now considering what measures it will introduce. Calls for legislation banning the importation of tyres not meeting this criterion have ostensibly been made in response to a number of vehicle accidents involving reportedly sub-standard Chinese made tyres, however it is also no secret that Chinese tyre imports are hurting the bottom line of Indian tyre manufacturers.

In June representatives of India’s Industrial Policy and Promotion department, Consumer Affairs department and Bureau of India Standards met with those from vehicle and tyre producers to discuss this issue and prepare a case to present to the government. A proposal to introduce a US$135 anti-dumping duty on imported tyres has also been submitted to the government.

23rd August 2007/by Tyrepress Editors

US Trade Agency Votes to Continue OTR Tyre Dumping Claims

The United States International Trade Commission has voted to further investigate the joint petition presented by Titan International and the United Steelworkers in the wake of accusations of foul play on the part of Chinese OTR tyre manufacturers and China’s government. The Commission voted 6 to 0 in favour of continuing the investigation into alleged dumping of OTR tyres onto the US market and illegal government subsidies.

According to the International Trade Commission, 18 per cent of all OTR tyres sold in the US during 2006 were sourced in China, a US$306 million chunk of the market. As this percentage is growing year on year both Titan and the union see China as a growing threat to both US based OTR tyre manufacturers and the almost 4,000 workers they employ, and have stated their opinion that imposing duties on Chinese OTR tyre imports is the only means by which the tide of cheap imports may be stemmed.

“We are very encouraged that the Commerce Department voted to proceed with the investigation, 6-0,” said Titan chairman and CEO Maurice M. Taylor Jr. “We still have a long way to go, but the important part of this whole process is determining what is fair and lawful. The American working men and women can be as competitive as anyone in the world, but when foreign governments subsidise and carry unlawful trade practices, then the US government must even the playing field.”

22nd August 2007/by Tyrepress Editors

Michelin North America Plans Major Plant Expansion Project

(Akron/Tire Review) Michelin North America announced plans to spend as much as $350 million on improvements and expansion projects at all of its “major manufacturing facilities” in South Carolina. The four-year project will add some 100 jobs, the company said.

While MNA didn’t give plant-by-plant specifics, the company did say that the project includes capacity boosts for its OTR and X One super wide tyres. Other aspects of the project will boost production of tyre components at its semi-finished goods plants, and general improvements.

The company said its investment and job growth is based on finalising agreements with state and county governments.

“With increasing competition from Asian imports and high raw material costs, Michelin will remain competitive in North America by continuing to manufacture tyres in more efficient operations with skilled professional employees,” said Jim Micali, MNA chairman and president.

7th August 2007/by Tyrepress Editors