Are you in the market for a set of new Hankook tyres, to be bolted onto a rugged off-roader? Chances are you will have to search far and wide.
With New Delhi imposing import curbs, it has become uneconomical for overseas tyre brands to operate in India, industry sources told ET.
So, Japan's Falken Tyres earlier this month announced that it will reduce operations to only four cities in India - Delhi, Ahmedabad, Ludhiana and Jalandhar. South Korea’s Hankook has wound down its own dealer network in India and is now operating through private distributors only, sources said.
Falken Tyres in a letter to its dealers said that there was a lack of tyre supply following the import restrictions by the government and there was inadequate supply even from local sources. ET has viewed a copy of this letter.
“In view of these external uncontrollable circumstances, Falken Tyre India Pvt Ltd shall focus to operate on a smaller scale in selected regions effective 1st April 2021,” the letter read.
The company had a contract manufacturing arrangement with Apollo Tyres in India, but that deal has fallen through, sources said.
ET could not reach Falken Tyres India for comment. Mailed questions to Hankook remained unanswered.
The Centre is allowing companies to import only 40% of their average volume in the past three years - that too only for tyre sizes not available in India.
Businesses of foreign companies that make tyres in India are relatively less affected.
France's Michelin, which is one of the largest importers of passenger car tyres into the country, has stopped supplies to several dealers to focus on its “priority partners” due to a shortage of supply.
“Owing to import restrictions for tyres, we recently experienced supply shortages,” a Michelin India spokesperson said. “Michelin India has decided to prioritise the sales of these limited stocks through its priority partners for the moment.”
The company has received a limited import licence from the Centre, the spokesperson said.
Michelin’s truck and bus tyres, which are produced at its factory near Chennai, and two-wheeler tyres produced locally through contract manufacturing, continue to be supplied as usual.
The import restrictions have also affected the businesses of other foreign companies such as Pirelli and Yokohama, people said.
India imported $274 million worth of car, commercial vehicle and two-wheeler tyres in FY20, according to data from the Department of Commerce. In the first nine months of this financial year, the imports were about $ 57.5 million.
A sharp reduction in imports has also led to an acute shortage of tyres in the market.
The government had moved the import of vehicle tyres into the restricted category in June last year to prevent dumping of cheap imports, the bulk of which came from China. These included tyres for cars, motorcycles, bicycles, buses and trucks.
