Demonetization hits Chinese tyre sales in India
Growth in Chinese tyre sales in the Indian replacement market has slowed down post demonetization, as the business is generally conducted only in cash. According to industry representatives, Chinese tyre sales, which rose by about 40 per cent in the Indian replacement market between April and October 2016, saw a de-growth of around 17 per cent after the note ban.
Indian tyre makers will have breathing time till the second quarter, as Chinese tyres may not enter the market.
Automotive Tyre Manufacturers’ Association (ATMA)’s Director General Rajiv Budhraja said Chinese tyres are largely traded in cash, as they don’t do any billing to avoid duties and taxes. ATMA represents eleven large companies in India, which collectively account for over 90 per cent of the country’s tyre production, Budhraja said imports are down to a trickle, as arrivals have been dampened intentionally to escape the glare.
Demonetisation also led to uncertainty in exchange rates, on the basis of which the landed cost is worked out. This uncertainty has further suppressed the business, as it will impact importers and dealers.
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