LAHORE: A drive to curb smuggling of tyres by customs department has led to price escalation because of the incapacity of local manufacturers and importers to meet the demand.

According to well-placed sources in the Customs Enforcement, it has been pointed out by businessmen during their informal meetings that the anti-smuggling drive of the department has put consumers into an ironical situation because of an abnormal price hike of tyres.

While requesting anonymity, the customs sources told this scribe that the department had seized 9750 tyres worth Rs73.6 million in 2020-21 against 9115 tyres worth Rs114.63 million in 2019-20 while it has seized 9729 tyres worth Rs76.73 million up to October in 2021-22.

They said the traders are in a fix as the local manufacturers are unable to meet the demand, importers are avoiding imports due to rupee devaluation and increase in duties while the entry of smuggled tyres has become next to impossible due to the departmental actions.

Abdul Qadeer, a local tyre retailer, said the market price of local tyres is Rs 9500 per tyre against Rs 10500 per tyre of Chinese make. Similarly, the price of the brands like Yokohama and Bridgestone is in the range of Rs14000 per tyre while the price of Good Year and Dunlop is in the range of Rs13000.

He said the market is full of uncertainty as a shortage of demand has created lull in the market. It has become difficult for the customers to make huge spending on purchase of tyres. According to him, the COVID-19 pandemic has also played a role in slowing down trading activities.

When contacted, Sh Amir Javed, the after sales manager of General Tyres, confirmed the situation, saying that the local manufacturers are in a position to meet just 30 percent of the demand. Out of the remaining 70 percent, smuggled tyres fulfil 40 percent of the demand with 30 percent by the commercial importers.

He said General Tyres is the sole major manufacturer of tyres in Pakistan, manufacturing all types of tyres. However, Panther Tyre and Service Tyre are also active in the field but they are not manufacturing car tyres and their production is restricted to motorbikes and auto rickshaw tyres.

Some importers told this scribe that they import tyres from China and Taiwan but they have stopped importing due to the rupee devaluation and a change in duty structure towards the higher end.

Meanwhile, smugglers are avoiding carrying out their activities because of the stringent actions by the customs department. Therefore, the local market is facing a dearth of 70 percent of the demand, leaving the consumers into a troublesome situation.

Source: Business Recorder – November 19, 2021