‘Tire Crisis’ Looming for Primorye

VLADIVOSTOK. September 1. VOSTOK-MEDIA – From late September onward it would be unprofitable to import used, but high-quality tires from Japan and China. The Customs Union committee has ruled that the import duty on used tires be fixed at 20% of the price, but not less than 20 Euros per tire.

According to the document, the import tax hike extends to tires for cars, buses, trucks and aircraft.

The ruling came following a heavy lobbying by two domestic tire producers - SIBUR-Russian Tires and Nizhnekamskshina. SIBUR-Russian Tires argues that driving on used tires decreases safety and causes considerable damage to the environment. What is more, the burden of recycling used tires is being increasingly shifted to Russia. In 2009 alone, about 932,000 used tires were imported to Russia.

Experts agree that the tax hike will be followed by a two-fold increase in prices on tires in Russia. Starting from late September, used tire imports will immediately become unprofitable or even loss-making business.

The ruling comes amid the already unfavorable situation on the Russian tire market: world price on rubber has increased two times over the past year due to increased demand for rubber in China; Chinese tire manufacturers raised prices on their products by a third; overload of production caused month-long delays in supplies to Russia of inexpensive tires (Kumho, Hankook, Maxxis, and others) which prompted some dealers to freeze their supplies.

The current situation is creating concerns as growing deficit in tire supply have been felt this summer throughout Primorye. For the time being, the local dealers’ stock of tires has almost sold out, which means that there is already nothing to fill the deficit with.

The conclusion is forced upon us that the “tire crisis” is looming ahead. Exerts estimated that retail prices on tires will skyrocket as early as this winter.

The only piece of advice that may be given to car owners under the current circumstances is that the sooner they stock up on tires the better.