Cheap Chinese wheels in dumping slug

[brydie76]

Whilst I agree that foreign manufacturers have a massive advantage over Aussie companies at the moment, a tax like this is a bit of a knee jerk reaction and could bring some undesired consequences that other people have brought up in this thread (ie people working for retailers/importers losing their job and/or these companies using methods to "dodge" the tax). Definitely think the Gov't could organise this better to not only benefit local manufacturers, but possibly also aid local job creation. But a simple import duty is easier to administer, and as such they choose that way out. Again...

[RASER]

Its ok, the Chinese Government will just switch to the next product/industry they can dump here and screw up others around the world.

Catch 22, we are addicted to its cheap products, but most of us hate the damage it does to workers and our local industries.

Good on ROH taking them on

[Bossxr8]

Originally Posted by bobthebilda

But the fact is if a manufacturer in australia wants to import these wheels (to fit to an australian made car) they will pay more. If an Australian wants to buy these wheels from a retailer, they will pay more. But oddly enough, if the wheels are fitted to a chinese made car, then no extra tariff is applied. In fact we can get the odd situation where a manufacturer in thailand can import the chinese wheels, fit them to a thai car, and the wheels come into australia technically at the same dumping price (and giving them an advantage over the australian manufacturer).

From what I can gather it does not effect Ford or Holden, they have contracts with the suppliers overseas and AFAIK are not part of this dumping scam.

Its the aftermarket wheels being dumped onto the market that are the issue.

And Ford and Holden's wheels have to be thouroughly tested before they fit them to cars. Its part of their ADR compliance, the wheels have to be impact tested etc.

[AU Mont]

yeah arent CSA wheels supposed to be australian and have ADR compliance? Some of there wheels buckle within a 100m distance of a pothole

id rather trust foreign JWL/VIA certification, same compliance as the factory wheels on my wifes late model liberty

[bobthebilda]

Originally Posted by Bossxr8

From what I can gather it does not effect Ford or Holden, they have contracts with the suppliers overseas and AFAIK are not part of this dumping scam.

Its the aftermarket wheels being dumped onto the market that are the issue.

And Ford and Holden's wheels have to be thouroughly tested before they fit them to cars. Its part of their ADR compliance, the wheels have to be impact tested etc.

The article that started this thread seem to indicate otherwise -

The impost on the Chinese-sourced wheels imported by the car-makers is at the lower end of the scale, at 8.2 per cent. GoAuto believes these wheels are made by CITIC Dicastal Wheel Manufacturing in China

Like other companies, Holden is waiting on Customs' final finding and recommendations, which are due to be handed down next week, as well as the minister's response.

Under the interim measures, wheels from one of the world’s biggest alloy wheel manufacturers, YHI Manufacturing, will be hit with the maximum slug of 87.7 per cent, as will all manufacturers who did not co-operate with the investigation by the Australian Customs and Border Protection Service.

The article isnt about being ADR compliant or otherwise.

[Shonky.]

Originally Posted by bobthebilda

I think the explanantion is a little generic. Going by that, Holden and Ford would be subject to dumping accusations if they exported cars to other countries and made losses (selling cars for less than it cost to make them) in the same year.

I made it deliberately generic, because if people won't even goggle dumping before posting then they are not likely to sit through me teaching them what it is.

Losses on a per unit basis

You are right Holden and Ford would be subject to the same. But we would need to build a car for a price, say X and then sell it for a lower price say Y

For it to be dumping you would need to satisfy X>Y

If you stripped out the government assistance in Japan, the wheel manufacturers have been found to be selling each wheel at less than what it costs them to produce it

[Shonky.]

Originally Posted by Kieron

Although the article wasn't clear, I read the govt. assistance came from the Chinese government. The article did mention a govt. owned smelter giving subsidies and I don't believe any of the smelters in Aust are govt owned?

If this is the case, it's not too dissimilar to Aust. where the Govt. are giving subsidies to Aussie car manufacturers who are then shipping the cars O/S.

correct, deesun was a bit confused, the assistance is from the Chinese Government

It is only similar in Aust if it can be proved that after accounting for assistance the cars are sold below the cost of producing them (once again on a per unit basis naturally) Not the case

[Kieron]

Understood shonky, what I meant in my second sentence was the Aussie govt. giving local manufacturers handouts and those manufacturers sell O/S in isolation. Didn't mean to infer it was dumping.

I'm not sure your interpretation of dumping is entirely accurate though mate, although it is valid :-) The WTO has a definition for it as well as when a country can take action against it.

Basically it revolves around selling a product in another country for less than its sold in its home country but rather than me repeating it, here's a good enough explanation -
http://en.wikipedia.org/wiki/Dumping_(pricing_policy)

[cheap]

I thought ROH were controlled/owned by Harley Davidson (USA). If I'm wrong let me know, but HD did take a controlling interest in a well known Australian wheel manufacturer in 2003-2004.

Could it be that the Australian consumer is being taxed because we're buying cheap Chinese wheels so that a USA company can maintain profitability - strange times we live in ...

[Shonky.]

Kieron, thanks for reading about it.

Yes, dumping is also when different pricing structures are used in the country of export to the xountry of origin. For this thread i was trying to stick to the breach that has occurred, being exports sold below their cost if production (adter accounting for assistance)

[KIWI-1]

Originally Posted by cheap

I thought ROH were controlled/owned by Harley Davidson (USA). If I'm wrong let me know, but HD did take a controlling interest in a well known Australian wheel manufacturer in 2003-2004.

Could it be that the Australian consumer is being taxed because we're buying cheap Chinese wheels so that a USA company can maintain profitability - strange times we live in ...

Harley Davidson owned Castalloy...

ADECISION by the US board of Harley-Davidson to close its Adelaidewheel-manufacturing plant with the loss of 212 jobs three weeks beforeChristmas has been slammed as heartless by unions.

TheUS-based company yesterday announced it would transfer its Australianoperations to China.

http://www.theaustralian.com.au/nati...-1226217645580


ROH manufacture in The Phillipines...

The ROH Philippines plants have utilised ROH's Australian-based technology, to enable the company to play a key role in the development of the local vehicle assembly industry. ROH Philippines manufacture a wide range of alloy and steel wheels for the local passenger cars, pick up trucks, utility vehicles and Jeepneys (Jeepneys are the Philippines' public transport vehicles). ROH Philippines has successfully won original equipment contracts from the world's biggest carmakers including Toyota, Nissan, Mazda, Kia, Suzuki and Daihatsu.

[Perun]

So... a few years ago ROH lost a local OE deal to a certain Singapore-based, publicly listed manufacturer with facilities in China, Taiwan and Malaysia. Mind you, this manufacturer is world's largest manufacturer of aftermarket alloy wheels, involved with some top end brands (OZ Racing, Enkei), including involvement in F1. So we're not talking cheap Chinese crap. Following that, ROH starts crying poor, complaining to the government and sets this whole thing in motion.

Fast forward to 2012. The gov't slaps this manufacturer (and other big players) with an 87% duty on all wheels out of China. Some copped smaller duties but all the big player get hit hard.

Results of said action: Chairman of the corporation in question orders that all Chinese shipments on the water be diverted to his Malaysian facility (thus not paying any duty), and cancels all orders for Australian aluminium. In the meantime, the Chinese moulds have already been shipped to Malaysia and are being set up. What exactly have ROH achieved with this?

I have already heard from multiple sources that ROH reps have been told to get the **** out of people's tyre shops. ROH will be gone within a few years becuase they've just lost all support from within the industry by screwing everyone but 20% of it over. In turn, this WILL decrease supply in the short to medium turn, and increase prices of wheels. Probably tyres too because shops will need to make up the lost revenue somehow.

How is this going I am currently setting up a tyre shop and this has screwed me over big time. Is all this worth saving 140 jobs? I hardly think so!

[Perun]

Originally Posted by turbo_nick

How is this going I am currently setting up a tyre shop and this has screwed me over big time. Is all this worth saving 140 jobs? I hardly think so!

Not sure what happened there, a chunk of text went missing. That should read:

How is this going to affect me as an Australian? I am currently setting up a tyre shop and this has screwed me over big time. Supply has just dropped right off and prices are going up as we speak. Is all this worth saving 140 jobs? I hardly think so! And the moment an ROH rep walks into my shop, he'll be told to get the **** out.

[dimka100]

I totally agree with you Nick, I don't work in the manufacturing industry or have any relevance to shops and all that ... but as a person that has some level of financial education and I see that this is the dumbest move I have seen our beloved GovCo pulling of in a while ...

[cs123]

Originally Posted by turbo_nick

How is this going I am currently setting up a tyre shop and this has screwed me over big time. Is all this worth saving 140 jobs? I hardly think so!

How would you feel if the tyre shop down the road was being subsidised by the government and sold tyres 20% cheaper than you?

The whole idea of anticompetitive behaviour is to eliminate the competition so that when they are out of business you can charge more.

We have this locally with the large supermarkets trying the same thing with smaller grocers. Take a loss now, drive them out of business, profit.....

[burnz]

local american businesses have gone broke due to wallmart!
wallmart accouts for 10% GDP of the entire USA from china's cheap stuff!

think about it..

[morak001]

If everybody chose to import stuff from Chinaland because it is cheaper and better for our economy to import rather than manufacture, where will the money come from to pay for it (not just the peeps working in the mining industry)?

Also need to consider the $$ flow (and the value of) through the economy and population before we send it back overseas.

[Shonky.]

tuff gig turbo nick, sorry to hear you are being affecting in the transition

I can appreciate that there are some stakeholders who will hurt short term

[Perun]

Originally Posted by cs123

How would you feel if the tyre shop down the road was being subsidised by the government and sold tyres 20% cheaper than you?

The whole idea of anticompetitive behaviour is to eliminate the competition so that when they are out of business you can charge more.

We have this locally with the large supermarkets trying the same thing with smaller grocers. Take a loss now, drive them out of business, profit.....

But the thing is, the manufacturers won't go out of business. They will find new markets and new opportunities. The only ones who are going to suffer are AUSTRALIAN businesses, run by AUSTRALIANS. I'm one of them. One of my former colleagues just opened up a shop last week. He is one too.

ROH sales dropped off because their styles are old, they've been having finish issues for years now, and to quote one OE manufacturer who dumped them "it's not the prices, it's the styles, the quality, the service."

Your view is an extremely short-sighted one and clearly you're not seeing the greater implications of this move. And don't be surprised if there is some sort of a backlash from the Chinese gov't.

[Shonky.]

Reading on the WTO website is probably the best place if someone wants a quick overview of dumping and it's implications

It also had probably the best concise definition I have seen:

Dumping occurs when goods are exported at a price less than their normal value, generally meaning they are exported for less than they are sold in the domestic market or third-country markets, or at less than production cost

[DRU842]

Originally Posted by shonkymofo

Kieron, thanks for reading about it.

Yes, dumping is also when different pricing structures are used in the country of export to the xountry of origin. For this thread i was trying to stick to the breach that has occurred, being exports sold below their cost if production (adter accounting for assistance)

I addition to the strict definition of dumping in the WTO, the Chinese & other dumping nations have a proven track record of raising prices after the after the local industry has been eliminated. This has happened in a wide range of manufactured metal products & chemicals - the saving grace for Australian retail has been the strength of the economy & the A$ over the past 3-4 years, in a global sense.
Australian Customs plays a very straight bat with dumping investigations, which typically take way too long to investigate & implement penalties (in this case investigations started in some form in 2004, with penalties only applying in 2012).
These cases are complicated but the basic test of exporting below domestic market prices, to cause injury to home market product is rapidly proven in the EU and USA, where interim dumping duties are decides & implemented quickly (90 days) .
Basically these companies (& possibly the Chinese Govt) have set out to break International & Australian Law, have been caught and are paying the price. It's a shame its taken so long and that other manufacturers & their workers have suffered.

[bobthebilda]

Originally Posted by shonkymofo

Reading on the WTO website is probably the best place if someone wants a quick overview of dumping and it's implications

It also had probably the best concise definition I have seen:

Dumping occurs when goods are exported at a price less than their normal value, generally meaning they are exported for less than they are sold in the domestic market or third-country markets, or at less than production cost

So for instance if the US was able to buy a G8 for the equivalent of $30,000 and australians bought the same car for $40,000, or if US got a carpice for alot less than we get it in australia, or if in the future the US was able to buy a VF for alot less than we get in australia, then that would be classified as dumping?? If the car manufacturer was doing this with the support of Australian taxpayer dollars, wouldnt the Australian Government and taxpayers also be guilty??

[cs123]

Originally Posted by turbo_nick

But the thing is, the manufacturers won't go out of business. They will find new markets and new opportunities. The only ones who are going to suffer are AUSTRALIAN businesses, run by AUSTRALIANS. I'm one of them. One of my former colleagues just opened up a shop last week. He is one too.

ROH sales dropped off because their styles are old, they've been having finish issues for years now, and to quote one OE manufacturer who dumped them "it's not the prices, it's the styles, the quality, the service."

Your view is an extremely short-sighted one and clearly you're not seeing the greater implications of this move. And don't be surprised if there is some sort of a backlash from the Chinese gov't.

They won't go out of business??? They will and they are dropping like flys. It's not just the wheel industry under threat from the Chinese manufacturers. This is becoming a chronic problem for us.

My view isn't short sighted. I am telling you what will happen in the long term when all the competition is gone.

That you are trying to set up a business that is modelled on the status quo of cheap (dumped) Chinese goods shows that you are too close to it to be objective.

If you are worried about the Chinese "backlash" you should really read about about the Chinese hypocrisy on a whole range of issues. Have a read about the Huawei NBN kerfuffle for a bit of a taste.

[XRtowcar]

See the EU and India are investigating dumping of alloy wheels In their regions as well.

[Perun]

Originally Posted by cs123

They won't go out of business??? They will and they are dropping like flys. It's not just the wheel industry under threat from the Chinese manufacturers. This is becoming a chronic problem for us.

My view isn't short sighted. I am telling you what will happen in the long term when all the competition is gone.

That you are trying to set up a business that is modelled on the status quo of cheap (dumped) Chinese goods shows that you are too close to it to be objective.

If you are worried about the Chinese "backlash" you should really read about about the Chinese hypocrisy on a whole range of issues. Have a read about the Huawei NBN kerfuffle for a bit of a taste.

I guess you are entitled to your opinion and I'm not going to waste my time on this any further.

[burnz]

Originally Posted by bobthebilda

So for instance if the US was able to buy a G8 for the equivalent of $30,000 and australians bought the same car for $40,000, or if US got a carpice for alot less than we get it in australia, or if in the future the US was able to buy a VF for alot less than we get in australia, then that would be classified as dumping?? If the car manufacturer was doing this with the support of Australian taxpayer dollars, wouldnt the Australian Government and taxpayers also be guilty??

no!!
dumping is when holden flood the US with cars below cost. say $12,000 aud

[robbyj]

China knows where it will be positioned in the next 50 years. China plans years and years in advance.

Don't worry if our manufacturing shuts down.. China has been buying up plenty of farms here we can work on.

[danmc]

I've been looking for wheels for my landaus for ages now. Would prefer to buy Oz made and owned. Hard to find ones I like though and hard to tell who is still doing what.
I have these makes listed as Aussie and still in business, any more?

Dragway http://www.dragway.com.au
Speedy -- thought they were but they say they import.
Performance wheels http://www.performancewheels.com.au
Roh http://www.roh.com.au/
Simmons - overseas now