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Tyre industry petitions against imports from China

New acquisition sets the wheel in motion for JK Tyre

  As tyre imports continue to rise, forcing the domestic industry to operate at 60 per cent plant utilisation, job losses are beginning to mount at ancillary units, is the complaint.

The industry say 5,000-6000 jobs have been lost in the past few months, especially contractual ones, with new hiring at a halt.

Rajiv Budhiraja, director general of the  Automotive Tyre Manufacturers Association (Atma), says as much as Rs 42,000 crore was invested over the past five years by his members to expand capacity, largely under-utilised.

“The past three years has seen a consistent decline in capacity utilisation, now down to around 60 per cent,” he said.

“The industry's turnover was around Rs 50,000 crore in FY15 and this growth was flat in FY16.”

Atma has already petitioned the central government for anti-dumping duty on import of cheaper Chinese radial tyres. Where an Indian one is priced at Rs 18,000-19,000, the Chinese variety is Rs 13,000-14,000.

Imports of truck and bus radials (TBR) had grown by 57 per cent over a year before for April-May, first two months of this financial year; Atma says this continued in June.

In May, around 150,000 TBR units were imported, 35-40 per cent of the estimated replacement market demand.

"This segment might get impacted if imports from China increase further,” says Subrata Ray, senior group vice-president, ICRA Ratings.

An ICRA analysis says revenue of the top seven domestic tyre companies fell two per cent, due to a six to eight per cent fall in realisations, although volumes grew by four to five per cent.