Russian media reported that tires made in China as a proportion to Russia's total tire imports has decreased.
The report quoted materials from Russian tire company Cordiant and said that in 2015, the market share of both Aeolus Tires and Triangle Tyre have dropped in Russia.
Some media therefore believed that Chinese tire producers are quitting Russian market. Is it true?
Sharp depreciation of ruble affects market
At the Tire and Rubber Expo held in Moscow, Russia, there were 42 Chinese firms, much less than in the previous years.
According to an insider of one of the sponsors, China United Rubber Corp., Russian market turning worse discouraged Chinese tire companies and some of them even considered quitting the market.
An industry insider said sliding share of Chinese tires in Russia was not entirely resulting from the anti-dumping measures taken by Russia, Belarus and Kazakhstan. The fundamental problems were sharp depreciation of ruble and the issue of exchange rate.
Chinese firms said that the decline in market share of Chinese tire companies was not because of Russia's unwillingness to purchase, but Chinese tire producers wouldn't sell.
Why not? Because Russian buyers couldn't make the payment. The Chinese firms couldn't collect the payment for goods, or the contracts couldn't be carried out at present prices.
Russia has massive demand for tires and local capacity is seriously insufficient.
Under such circumstances, importing product tires from China became a primary means to complement the inadequacy in Russia.
Anti-dumping benefits the third parties
The market share of tires made in China dropped in Russia after the Eurasian Economic Commission took anti-dumping measures against tires from China in 2015.
Usually, when a country launches anti-dumping measures, its imports decline, local brands will fill the blank and win the market share back.
However, it didn't happen in Russia. Local companies failed to win more market share because of the anti-dumping measures against Chinese products.
Gordiant said the 14.8%-35.4% anti-dumping tax rates against tires from China caused severe impacts on Chinese producers. But the Russian companies failed to win back themarket share used to be taken by their Chinese rivals.
On the contrary, European, American, Japanese and South Korean brands, who used to obtain high market shares, further expanded their shares and led to price hike.
The anti-dumping measures taken by Russia against China caused destruction to both sides and only benefitted the third parties.
To fit in the market environment in Russia, some Chinese tire companies increased output capacity of their overseas plants to supply Russian market, thus avoiding the anti-dumping tax.
The Chinese companies also adopted more flexible collection and payment strategies to lower operating risks with regard to ruble depreciation.
