Smuggling hurts local tiremakers

JAKARTA (JP): The Association of Indonesian Tire Producers (APBI) is attributing July's 10 percent drop in monthly sales of locally produced tires to the influx of smuggled products from China.

The Chinese goods are cheaper than the local tires, which sold about 600,000 units for the month, APBI chairman Aziz Pane told Bisnis Indonesia on Thursday.

Brands such as Double Happiness, Quin Lin, Advance, Great Wall, Tai San and Chang Chen have been found in Jakarta, Medan, Semarang, Surabaya, Bandung and other major cities, Azis said.

They entered the country through Batam Island, south of Singapore, and bypassed customs control as they were distributed to other parts of the country.

Fierce competition already exists among major producers with local operations, including Goodyear, Bridgestone and Gadjah Tunggal.

The plunge in the value of the rupiah since the financial crisis began in 1997 made the products costly for most motorists. Many have sought cheaper alternatives, including smuggled tires.

Aziz warned car owners that the smuggled products were inferior and below national safety standards. The tires could be dangerous, especially at high speeds or with overloaded vehicles.

APBI had already reported the problem to the Directorate General of Customs and Excise and the Ministry of Industry and Trade.

Customs officials said they had limited power to curtail smuggling and insisted that the onus lay with the the police to control the sale of the tires.

APBI previously complained about the import of used tires from Singapore, which it said hurt local producers. They enter through Medan and Jakarta in 40 containers, totaling about 48,000 units, each month. (02)