Toyo to shift Chinese tyre output to Japan

ERJ staff report (TB)

Cypress, California - Toyo Tire & Rubber Co. Ltd. will move production of consumer tyres it makes in China for export to the US to plants in Japan in response to the Obama administration's decision to impose higher tariffs on Chinese-made passenger and light truck tyres.

“Our No. 1 priority is customer satisfaction, and we are making every effort to minimise disruption in supplies to our dealers by expediting these production changes,” Toyo Tire USA Corp. said in a prepared statement.

Toyo did not say how many tyres it imports from China or which lines they are, but in testimony prior to the administration's 11 Sept decision to add 35-percent tariffs on Chinese consumer tyres for the next 12 months to an existing 4 percent duty, Toyo said the tariffs originally proposed by the International Trade Commission (ITC) would prevent it from importing any tyres from China during the three-year remedy period.

“The ITC's proposed remedy would, in effect, be a zero quota,” Toyo said in its testimony in August to the US Trade Representative Office, which advised the Obama administration on the matter.

As for pricing, Toyo said it is assessing the impact of the trade action on the marketplace.

Toyo sources tyres for the US market from Cheng Shin-Toyo Tire & Rubber (China) Co. Ltd., its former joint venture plant in Kunshan, China. Toyo and Taiwan's Cheng Shin Rubber Ind. Co. Ltd. set up the joint venture in 1995, but Toyo disclosed in early September it is selling its share in the venture and instead will build its own plant in China.

At that time, Toyo said it would switch its relationship with Cheng Shin to a consignment manufacturing agreement to allow it to continue to supply customers until its own factory comes on stream, which it's targeting for year-end 2011.

This is an external link and should open in a new window. If the window does not appear, please check your pop-up blocking software. ERJ is not responsible for the content of external sites.

Toyo to shift Chinese tyre output to Japan from Tire Business (a Crain publication)