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April 18, 2001
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Money > Business Headlines > Report April 18, 2001 |
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Two-wheeler firms seek duty hike to counter Chinese importsV Phani Kumar Under threat from cheaper Chinese imports, the domestic two-wheeler industry has made a representation to the finance ministry to increase the basic customs duty on import of two-wheelers to 105 per cent from the current 35 per cent. Senior industry officials say that motor-cycles from China are being brought at prices 40 per cent-plus lower than the rates at which they are sold in India. Bajaj Auto chairman Rahul Bajaj said: "We are concerned over imports of new two-wheelers from China. The current duty levels of 35 per cent is not enough." "We welcome competition from China if they follow the right practices. But we do not know the exact cost of manufacturing in China and about their accounting policies. If the imports are allowed at the current duty, there will be no domestic industry, no employment, and no exports," Bajaj added. The domestic industry's initiative stems from the possibility of a deluge of Chinese two-wheelers, following the withdrawal of quantitative restrictions from April 1. It is understood that all the duties notwithstanding, Chinese goods will be priced at almost half the cost of Indian products. It is understood that a Delhi based dealer, who has already imported kits for 74cc, 125cc and 250cc bikes for assembly, has put the on-road price tag of a 250cc motorbike at just Rs 36,000. In comparison, Bajaj Auto's new offering in the motorcycles segment, the 175cc Eliminator, is priced at over Rs 88,000 (ex-Pune). The domestic two-wheeler manufacturers have seen a surge in domestic demand for motorcycles in recent quarters. Hence, several, including Kinetic, LML and Bajaj Auto, have begun to strengthen their presence in this category. To their credit, Chinese imports have ruined the domestic two-wheeler industries in south-east Asian countries such as Philippines and Malaysia, other industry sources said. Currently, some of these products are being tested for emission norms at ARAI, Pune. The Chinese are understood to have the double advantage of lower wages and higher productivity. Powered by YOU MAY ALSO WANT TO READ:
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