Tyre Firms Asked To Shift To Radials For Survival
The tyre industry will have to dump its obsolete cross-ply tyre technology and go in for all-steel radials and tubeless tyres, according to All India Tyre Dealers Association president, S P Singh.
With the entry of top multinational giants like Michelin of France and Kumho of Korea, the landscape of the Indian tyre sector was all set to change and it was high time the local manufacturers realised the truth and 'fell in line', Singh told PTI.
Taking a dig at the concern expressed by tyre manufacturers that the sector would soon go out of Indians' hands, he said the tyre sector had formed a league to mainly resist technology improvement.
Ever since delicensing of the sector, a capacity of six million pieces had been added in India but unfortunately little effort had been made to produce radial tyres, he said.
Recalling the first memorandum submitted by tyre dealers for allowing import of tyres in 1982, he said truck operators had gone on strike in 1988 demanding import of tyres under open general licence (OGL).
"But the government imposed such high duties that it has remained a mere paper exercise, he said, wondering, "why shed tears for closure of companies if they are unable to withstand competition."
Singh said no tyre manufacturer in India had any plans and a grim reminder of the fact was the piecemeal fashion of introducing radial tyres in the country.
"The indigenous industry cannot cope up with competition and it was why it looked towards government protection," he said.
The introduction of new tyre technology was very crucial for the country, especially in view of the movement of vehicles carrying cargo, he said. In fact, the truck and bus tyres formed the backbone of the tyre industry and therefore, it was all the more important to give the best technology for the transport sector.
Tyres accounted for 38 per cent of the operating cost of transport operators and it could be brought down to at least 20 per cent by introduction of radial tyres, he said.
Substantiating his point, Singh said Michelin inducted 500 all-steel radial tyres in some cargo vehicles on trial basis and their performance during the last three months had been "stupendous", covering 50,000 km.
"This proves that they give a per km advantage to the user and moreover, they had been found helping in a better control of the vehicle besides being skid-free and fuel-efficient, he said. "At one stroke of introducing a new technology, better economy could be brought to the road transport system," he said.
Singh said with 1.1 million additional commercial vehicles are likely to ply on Indian roads by the turn of the century, it was all the more necessary to induct all-steel radial tyres.
This also called for speedy steps to rationalise the customs duty on tyres. While both import of raw materials for tyre production and tyres attracted customs duty, only tyre imports were levied countervailing duty, he said and added that such duty had to go.
On the other hand, the tyre manufacturers did not offer any package, especially services to the users. "the industry should be service-oriented but it is totally missing as we have a captive market. And there is no fair price nor new technology," he said.
There was also a massive cushion for tyre prices, he charged, pointing out to the bureau of industrial cost pricing findings that the tyre prices were 25 per cent higher even after taking into account a 12 per cent rate of return.
Singh's statement assumes significance in the wake of a memorandum submitted by the tyre industry to the government expressing concern over its proposed move to allow free imports of new as well as used or retreaded tyres for motor cars and tractors and rubber tubes.
"Let there be mergers and acquisitions. We have to shed our ostrich-like policy. At least, let the users enjoy some good time for a few days, he added.