Imported tire prices rise 25% in one year – Journal

KARACHI: Imported tire prices have increased an average of 25 percent from January to date due to the massive devaluation of the rupee, the imposition of regulatory fees (RD) and an increase in import prices.

Importers are worried about reports of a further increase in R&D and additional tariffs on luxury items, including tires, to squeeze demand and reduce the country’s growing trade deficit.

Pakistan Tire Importers and Dealers Association (PTIDA) President Ashraf Dharani said the government considers tires to be luxury items, but fall under the category of items all over the world. essentials for daily use.

A random market study found that Chinese tires (175 / 70R13 and 185 / 65R14) now cost Rs 7,000 and Rs 8,500, up from Rs 5,500 and Rs 6,500 in January. Dunlop tires (175 / 70R13 and 185 / 65R14) are now available at Rs 8,950 and Rs 10,750 against Rs 7,350 and Rs 9,275.

As a result, the prices for used tires (without any puncture points) have also increased significantly. A New MA Jinnah Road dealer told Dawn that a set of four used Bridgestone or Good Year tires (155/65/13) is now priced at Rs 15,000 compared to Rs 8,000-9,000 in January.

Further increase in duties likely to stimulate smuggling

Bridgestone (175 / 70R13 and 185 / 65R14) sells for Rs 10,500 and Rs 13,150 against Rs 8,100 and Rs 10,700.

Prices for locally made tires have increased 8 to 11 percent over the past year.

Protect the local industry

The president further stated that the government strongly supports the local industry which only meets 23% of the overall demand. He added that taxing R&D has historically only promoted the informal economy.

Mr. Dharani said people in the market had failed to pass the full impact of rising imported tire prices on to consumers. Due to the high incidence of tariffs and other factors, contraband tires still hold a large market share in an annual demand of 10 million tires, he said.

“Any increase in R&D would put additional pressure on tire prices and give smugglers a cushion to improve their market share,” he feared.

He said the annual demand for passenger cars is 4.85 million tires, of which imports are 2.59 million, and the local industry produces 1.119 million tires. The rest is covered by contraband tires.

The demand for truck / bus tires (radial and non-radial) is about 4 million tires while the annual import is 1.4 million and the shortfall is 2.6 million (2.2 million radial and about 400 000 non-radial tires) is satisfied by the contraband. There is not yet a local industry for the manufacture of radial tires while 25,000 non-radial tires are produced each year.

The annual demand for light truck tires (radial and non-radial) is 4.5 million tires while annual imports are estimated at 1.44 million tires and the local industry manufactures 560,000 tires. The rest of the market demand is met by smuggling.

He said that after a 10% increase in the FY22 budget, the current rate of R&D on truck / bus tires is 25%, while for light truck and car tires it is by 20%.

In summary, the total annual demand (excluding bikes) exceeds 12.65m, of which 5.5m of tires are smuggled, he said.

The PTIDA chief claimed that contraband tires for cars, light trucks and buses / trucks are around 25-35% cheaper than legally imported tires.

He said that a PTIDA delegation met with trade advisor Abdul Razak Dawood before the FY22 budget and proposed a reduction in R&D on importing tires, but instead the government has increased R&D to protect the industry. local. “As a result, a large volume of legal trade has shifted to smuggling,” he lamented.

Posted in Dawn, le 5 December 2021

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