Cheap Chinese wheels in dumping slug

[Bossxr8]

Anti-dumping duty of up to 87.8 per cent slapped on ‘unfair’ Chinese alloy wheels
1 June 2012
By RON HAMMERTON
CHINESE alloy wheel importers have been hit with anti-dumping import duties of up to 87.8 per cent after an Australian government investigation into claims of under-priced wheels being sold in Australia to car manufacturers and aftermarket retailers.

Customs investigators found that the Chinese manufacturers were getting up to 34 forms of government assistance, including cut-price aluminium from government-owned smelters and a range of tax breaks.

Australian car-makers Ford Australia and GM Holden have been caught up in the action that was triggered by a complaint by Australia’s biggest alloy wheel manufacturer, Arrowcrest Group – the Adelaide-based maker of ROH wheels – which has suffered a major slump in wheel sales since 2003.

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.

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 complaint was lodged by Arrowcrest to save its Woodville plant and its 140 workers from being put out of business by what it regards as unfair competition from the cheap imports.

ROH national sales manager Peter Hitchen told GoAuto that Arrowcrest had once produced 65,000 wheels a year in Australia, but that had fallen to 9000 a year.


He said ROH had once supplied all Australian vehicle manufacturers with both steel and alloy wheels, but now the company’s only original equipment customer in Australia was Toyota Australia.

ROH wheels have been made in Adelaide since 1946, when the factory was established at Woodville North by a British consortium.

The investigation was initiated in November last year, with the preliminary findings handed down in April. The duties imposed on the various importers range from just 2.0 per cent to 87.8 per cent, and will come into force on June 11.

Arrowcrest told the federal government that one of the local car-makers had used a price quote from a Chinese product as a lever to drive down the price of locally made wheels to unprofitable levels.

The company also pointed to declining Chinese wheel prices, even though the price of the raw material – aluminium – had risen 80 per cent on global markets.

One type of wheel supplied by a Chinese manufacturer to an OE manufacturer was undercut by a Chinese replacement to the tune of $40 to $50, costing Arrowfield a supply deal that had been in place for more than 10 years.

The federal investigation concluded: “Based on this analysis and evidence provided by Arrowcrest, there appear to be reasonable grounds to support the claim that exports of ARWs (alloy road wheels) from China at dumped and/or subsidised prices have caused material injury to the Australian industry in the form of price depression and price suppression during the investigation period by undercutting the Australian industry’s selling prices.”

Most of Arrowfield’s lost volume occurred between 2003 and 2007, before stabilising.

Australian wheel manufacturers were not the only ones to suffer a slump, with wheel importers from other countries suffering an even bigger decline in the face of the Chinese competition.

Although Arrowfield brought the action, it was supported by two smaller Australian manufacturers, Dragway and Performance Wheels.

On the importer side, Customs and Border Protection officers received information supplied by importers Mullins Wheels, PDW, GM Holden, Versus Wheels, Primal and YHI Australia.

According to the official report, alloy wheel retailers Bob Jane T-Marts and Speedy Wheels “declined to fully co-operate”.

The dumping claim and subsequent action is the first of its type concerning the wheel industry.

GoAuto understands that many wheel retailers are unhappy about the development, fearing that the rapid price rise will adversely affect their businesses, even driving some to the wall.

http://www.goauto.com.au/mellor/mell...257A10002677D7



Good to see our government do something about these sorts of things, didn't know they had a spine.

[Polyal]

Well bugger me, hopefully a sign of things to come? Small steps.

[nstg8a]

just need to do the same now to protect the car industry as a whole...

[Jason[98.EL]]

Originally Posted by nstg8a

just need to do the same now to protect the car industry as a whole...

I agree

would be great to see the gov do something better for the manufacturers and make aus made cars more appealing

Jason

[Kryton]

Save 140 jobs in Australia - but the long term outcome might end up costing even more jobs than it saved.

[nstg8a]

Originally Posted by davway

Save 140 jobs in Australia - but the long term outcome might end up costing even more jobs than it saved.

how could it cost more jobs?

not having a dig either, genuine question.

[Kryton]

Originally Posted by nstg8a

how could it cost more jobs?

not having a dig either, genuine question.

GoAuto understands that many wheel retailers are unhappy about the development, fearing that the rapid price rise will adversely affect their businesses, even driving some to the wall.

If the massive price hike drives business's to shut - people lose their jobs.
It only takes 1 chain to go into administration and youve lost more jobs than youve saved.
Not to mention lost jobs if these business's stop importing large amounts of rims too.
Its the knock on effect.

[Bossxr8]

So they can't sell any other wheels other than the cheap Chinese ones. Pffft.

[Jim Goose]

not to mention quite a few of these chinese rims have failed

[nstg8a]

Originally Posted by Jim Goose

not to mention quite a few of these chinese rims have failed

yes, its quite staggering to see how some of these cheap rims have catastrophically failed.

[BHDOGS]

nothing better then being forced to pay more for something to save 140 of someone elses jobs ah capitalism at its best next we should increase tariffs on imported cars that way ford will sell so many they will drop the prices of there new cars! lmao yeh right.

[turbodewd]

The chinese govt are fairly smart. Theyve realised their competitive advantage v everyone else is masses of cheap labor. Theyve positioned themselves as the world's factory.

They may be very economically powerful in 10-20 yrs.

Australia needs a bigger population...the more we can fend for ourselves the more we can shape our own destiny.

We need a baby bonus which is a tax deduction to be claimed by mother or father only. If youre a 17yo girl you get not much! We want the productive people making kids - not Centerlinkers.

[Shonky.]

Originally Posted by davway

GoAuto understands that many wheel retailers are unhappy about the development, fearing that the rapid price rise will adversely affect their businesses, even driving some to the wall.

If the massive price hike drives business's to shut - people lose their jobs.
It only takes 1 chain to go into administration and youve lost more jobs than youve saved.
Not to mention lost jobs if these business's stop importing large amounts of rims too.
Its the knock on effect.

there is more value added in manufacturing than importing

I would rather hurt an importer immediately than a manufacturer slowly

[Kieron]

Its not just the importer though, its the retailer like Bob Jane etc.

ATM, the retailers do cheap rim packages, meaning many will likely buy. Increase the price by 80 odd percent and you will kill the low end market. Its then likely the stores will have to lay off tyre fitters and sales staff. There's over100 BJ stores alone, lay off 1 person per store and your close to that 140 staff with one chain.

[Shonky.]

Even if you were right and the tax on one chinese exporter affected demand for wheels via increased prices(???) the fact remains that GDP or productivity is measured in value added.

More value is added by changing a raw material into a finished good than is added by importing or the retail supply chain.

That is why we should buy Australian made.

Don't focus on the slight rebound effects like importers or retailers of foreign production missing out.

Not to mention market distortions that come from anticompetitive behavior like dumping

[landau460]

would 'nt there be some sort of roll on effect they had a short term job supporting a short term shonky import industrie. To hopefully a long term job supporting an industrie that will be more sustainable.
More jobs for our own boys!

[Kryton]

If Ford and Holden have to pay a substantial amount more for their rims, which lets face it, are struggling at the moment without an extra cost, whos to say it isnt going to push one of them over the edge and they shut down manufacturing here.
Theres several thousand jobs (plus contingent jobs) gone in one shot.
If one of the 2 shutdown, its likely the other will follow suit within a matter of years - there goes another several thousand more yet again.
Value adding my arze.
All to save 140 jobs which really arent on the line - even as stated by the article Most of Arrowfield’s lost volume occurred between 2003 and 2007, before stabilising.
Looks to me more like someone trying to drum up some extra business for themselves at the untold expense of the rest of the industry.

[AU Mont]

i wonder how many re-branded wheels will be affected by the markup? So this is every rim thats not made in australia?

its going to be a very crap market to buy rims, sales will slow, and staff will go, i agree with davway.

Originally Posted by Jim Goose

not to mention quite a few of these chinese rims have failed

youre aware that major car manufacturers are using these 'horrible' wheels? So does Apec and Rodney Jane wheels......... both which are JWL/VIA certified

[.FoMoCo.]

Customs investigators found that the Chinese manufacturers were getting up to 34 forms of government assistance, including cut-price aluminium from government-owned smelters and a range of tax breaks.

For those of you defending the chinese exporters, have a look at the above quote and tell me that it is somehow a level playing field for Australian manufacturers. Hasn't enough manufacturing gone to China already? I wonder what assistance ROH is getting from the Australian government...

I work in manufacturing and can tell you it's a sorry state of affairs at the moment, so many places shutting down. It is impossible to compete against China with the current conditions, and I for one applaud the stand taken here, token gesture or not.

[AU Mont]

I wish i had a paycheck that made me not care about how expensive everything is in australia

unfortunetely the price of fuel, food, rent, rego, electricity and everything bloody else rises each year, yet wages only rise a fraction in proportion

its hard to support the locals sometimes.......

[JC]

What brands are we talking about? I would have thought lots of rims (including speedy etc) were made in China. Everything these days is made to a price, and China currently offers the cheapest.......

[Shonky.]

Originally Posted by .FoMoCo.

For those of you defending the chinese exporters, have a look at the above quote and tell me that it is somehow a level playing field for Australian manufacturers. Hasn't enough manufacturing gone to China already? I wonder what assistance ROH is getting from the Australian government...

I work in manufacturing and can tell you it's a sorry state of affairs at the moment, so many places shutting down. It is impossible to compete against China with the current conditions, and I for one applaud the stand taken here, token gesture or not.

good on you little Aussie

[Shonky.]

Originally Posted by AU Mont

I wish i had a paycheck that made me not care about how expensive everything is in australia

unfortunetely the price of fuel, food, rent, rego, electricity and everything bloody else rises each year, yet wages only rise a fraction in proportion

its hard to support the locals sometimes.......

I hear you, but if people at least think about it they may sometimes be able to help when the Aussie product is only a little dearer

Think about it like paying your brother a little more to mow the lawn than a stranger. Australia being the family, foreign exporters being the stranger

[outside]

its about time

[Shonky.]

Originally Posted by davway

If Ford and Holden have to pay a substantial amount more for their rims, which lets face it, are struggling at the moment without an extra cost, whos to say it isnt going to push one of them over the edge and they shut down manufacturing here.
Theres several thousand jobs (plus contingent jobs) gone in one shot.
If one of the 2 shutdown, its likely the other will follow suit within a matter of years - there goes another several thousand more yet again.
Value adding my arze.
All to save 140 jobs which really arent on the line - even as stated by the article Most of Arrowfield’s lost volume occurred between 2003 and 2007, before stabilising.
Looks to me more like someone trying to drum up some extra business for themselves at the untold expense of the rest of the industry.

Mate, I'll say it again

VALUE ADDED is what matters. It's how we measure GDP. It is not just a management buz word or something I made up.

Just like you as a retail consumer, Australian car manufacturers can make a purchasing decision between Australian made and imported.

By your logic of cheaper is better where does the buck stop?

Shouldn't we all just buy cheaper Chinese production and **** all this buy Australian made nonsense? Why don't all Australian car companies import instead of manufacturing vehicles here? Same thing. Unfortunately some people actually have expressed this view on here.

Add to that the fact that these cheap wheels are dumped here, not sold under free market conditions. The definition of dumping is (very roughly) that overseas production is sold in another market below the cost of production. This is made possible because of incentives in China. The Chinese government is essentially paying to allow those wheels to be a better proposition in our country for buyers than other alternatives.

That cannot be allowed to happen. We can't produce everything competitively here, but when foreign governments are reducing the scope of what we can, then that's a problem.

I think what is needed for this country to have any chance at manufacturing is education. People need to realise how much they are ****ing in their own nest with their purchasing decisions. We should be prepared to pay $6 for something that keeps Australians in work rather than $5 for something that puts Aussies out of work.

And sure, this issue has been highlighted by the self interest of the Australian wheel manufacturers. But that does not mean the issue they have highlighted is not unsound

[Flat Top]

china inc works on the basis of supply and dominate local industry-thru low price on targeted market segments (even with their own local local distribution channels),

They have always worked that way history teaches us this !.

Food supply next, iron ore (yes they will and are setting up their own pits (Roy Hill and Angola ) to beat Rio and BHP prices down .

I dont think most Australians want to have a service based economy which is where we are heading, we need manufacturing , agriculture.mining as spokes to the quality earnings wheel of the future dont we????.

Politicians better wake up!! and start looking at other Dumping areas! that are wrecking the Australian Manufacturing base.
GM sourcing decisions are Made in Shanghai these days anyway!!
trev

[morak001]

If the Australian manufacturers were put out of business by these subsidised imports, I wonder what will happen to the cost of the imported product then.

The Australian manufacturers not only provide a job to put on a statistic. There are also the less tangible benefits of skills and technical capabilities, ie trades and engineers, once these are lost we are not really capable of doing much at all and will be at the mercy of importers.

[Shonky.]

Originally Posted by morak001

If the Australian manufacturers were put out of business by these subsidised imports, I wonder what will happen to the cost of the imported product then.

The Australian manufacturers not only provide a job to put on a statistic. There are also the less tangible benefits of skills and technical capabilities, ie trades and engineers, once these are lost we are not really capable of doing much at all and will be at the mercy of importers.

positive externalities, I love that ****, thank you

Aussie manufacturing, get behind it peoples

[BadMax]

So who is going to be the first to complain about having to pay an extra $400 for their Falcon because of a set of rims? It'll start with rims and where will it end? Who is to say other manufacturers wont take the same dobbing in act as ROH and our local produce ends up costing thousands more than previously?
Has anyone looked at the current ROH catalogue, it's straight out of 1989! They have based their business on OEM's in Australia, Mitsubishi is gone and the rest probably wont be too far off, then what? They have barely touched the aftermarket segment.

The we get to aftermarket wheels, how many people have bought $1,500 wheel an tyre packages from major retailers. Will you pay an extra $500 for the same thing or just import a set from over seas?

Sure make statements of support Australian manufacturing, how when we barely make anything and what would do is priced out of the market?

[2011G6E]

Set up a high level of protection for the car industry here? Be careful what you wish for...you might get it.
Then we can go back to the bad old days of lazily-built under-equipped Australian cars, because they know the government will heavily protect them from the ravages of the big bad world outside our borders...

As for protecting car parts makers...it's a bit rich for our government to complain that other countries do it. Hasn't there been a few parts makers here in Oz that had to shut down over the last ten years or so because the government claimed that "other countries don't protect their manufacturers like that", and we had to stop subsidising them?

As for alloy wheels, I remember the old days when they were all pretty expensive for anything but the most basic ones. I recall paying $80 a wheel in 1982 (Hell, even 14" chrome steel 12 slotters were $50 each back then) when I was working in a decent job at Woolworths full time and only taking home $160 a week...half your paypacket for one modestly styled 14" alloy wheel, and that wasn't a good Simmons or anything either. People don't know how good we have it now in costs of car accessories...things that once broke the bank and had to be saved up for for a year or two are an impulse buy now.