Bumpy ride for tyre sellers
Everything was going good for the automotive tyre industry, as the amount of vehicles was first spiralling keeping rate with the growing overall economy of Bangladesh.
However the coronavirus pandemic changed the whole scenario since March.
The deadly pathogen to enter the market with a tsunami of problems, which started with an enormous slide in the number of vehicles on the roads because of a movement restriction imposed by the government to curb the spread of the virus.
The require for tyres also experienced a steep fall when its supply dried up as the neighborhood and international manufacturers closed their doorways amid lockdowns to keep carefully the Covid-19 at bay.
Now the marketplace players in Bangladesh see a 20 per cent year-on-yr decline in automotive tyre revenue this year because of the complete halt in business in the 90 days since March.
Some Tk 5,000 crore worth of tyres were sold in 2019, which Tk 3,900 crore were of commercial vehicles and Tk 1,100 crore of passenger vehicles, according to industry estimates.
Now they fear sales of commercial car or truck tyres might fall by 10 % to Tk 3,500 crore and the passenger motor vehicle tyres to visit a drastic 54 % cut in product sales to end the entire year with Tk 500 crore.
At least 1.9 lakh bits of commercial vehicle tyres and 1.2 lakh pieces of passenger vehicle kinds were sold in 2019, explained Mohammed Shahidul Islam, chairman of HNS, an importer of Korean tyre manufacturer Hankook, one of the largest tyre makers in the world.
The private car users prefer premium quality tyres for reliability, safety and the worthiness for the money, he said.
But substandard and affordable tyres imported with no quality test are also available for sale, which are one of the major known reasons for road accidents in Bangladesh, Islam said.
Tyre sales have already been bettering since June, particularly in the commercial segment with the beginning of economic actions, said Shahadat Hossain Chowdhury, chief financial officer and business secretary of CEAT AKKHAN.
The joint venture company of CEAT Ltd (India) and AK KHAN Co (Bangladesh) distributes tyres for trucks and buses, mild and small commercial vehicles, motorcycles and auto-rickshaws.
Tyre product sales were the lowest found in the April to July period, said a senior official of Gazi Tyres, the largest local manufacturer of commercial vehicle tyres for three-wheelers, buses and trucks.
The sales of commercial vehicle tyre have reduced a whole lot amid a fall in its source from the Indian and Chinese producers, said Nazrul Islam, standard manager of Veloxo Trading, the only real importer of Indian tyre brand MRF.
"We used to market tyres worth Tk 30 crore a month, which is normally hovering around Tk 17 crore today. The demand was there, however the supply crisis is currently pulling us behind."
The costs are also somewhat higher now thanks to the source shortage, he said, adding that the crisis will be short-lived.
During the pandemic, the transport cost from Chennai to the Chattogram slot increased around $100 every container, but none of the 74 distributors Veloxo has across the country increased the retail rates of commercial car or truck tyres, he said.
In the commercial car or truck tyre segment, the MRF's promote share is 30 %. Apollo controls 5 per cent of the segment, Birla 10 %, CEAT 3 %, and Hankook 1 %. The rest 51 % is managed by non-top quality Chinese tyres.
In the individual car tyre segment, the combined share of Japanese brands Yokohama, Bridgestone and Toyo and US brand Dunlop stands at about 70 %, according to a report conducted by HNS.
Thai make Maxxis owns 20 % share, Korean brand Hankook 2 % and non-branded Chinese tyres the others 8 per cent.
Japanese tyre brands are common among consumers, and gleam good demand for Thai and Korean tyres, said Mojibur Rahman Sheikh, manager of The Tyre & Battery Bazar, a retailer in the city's Karwan Bazar.
There are two types of tyres regarding manufacturing: bias and radial. And 90 % of owners of commercial vehicles apply bias tyres to minimise expense.
The future of the tyre markets is bright as the amount of cars is increasing by around 10 % a year, said Amzad Khan Raju, managing director of Shawan International, an importer of Maxxis tyre.
Hasanur Zaman, owner of Dhaka Battery Sales at Shyamoly on Mirpur highway in the capital, said product sales decreased by almost 40 % year-on-year since the start of the pandemic.
"I am struggling to market an individual product a day or making Tk 40,000 a day time. My capital is lowering fast, and the owner of the shop space is not very interested in exempting me from the monthly rent."
According to him, the automobile owners like to keep carefully the vehicles indoors, that their dependence on tyres has declined substantially.
Abul Mansur Mojnu, owner of MS Khan Tyre and Battery pack Shop at Uttara Sector-3, said he has also seen a 50 per cent fall in business.
He had applied for support from banks beneath the stimulus package the federal government announced for small and moderate enterprises. But he previously to return empty-handed.
