SMUGGLING and imitation continue to hound the tire industry not only in the country but worldwide.
Marc Louie Tagle, president and chief executive officer of the Philippine Allied Enterprises Corporation, the exclusive distributor of Bridgestone in the country, said that smuggling and imitation are evident in the industry as small tires distributors, mostly in China, are only taxed “a small amount, instead of the full amount” of required taxes for importation in the country.
“Of course, smuggling of tires is still around…we have our connections with the customs [bureau]. We see their shipping records, their invoices, but they are out of this world. They [smaller China companies]are only taxed in a small amount, instead of the full amount,” Tagle explained.
The tires industry is losing about 20 percent of total revenues because of worldwide smuggling.
Bridgestone had a total revenue of $40 billion worldwide.
Last year, the tires industry in the Philippines had an estimated revenue of P17 billion to P19 billion—P3 billion for Bridgestone, P4 billion for Goodyear and P10 billion to P12 billion for other companies.
Aside from smuggled tires, Tagle said fake tires are circulating in the market.
“By looking at it, you won’t really recognize (that the tires are fake). You would determine it in performance. Some are really good copies…they have the exact same design, patterns and footprints,” Tagle said.
Tagle said said that consumers come to authorized dealers when their tires are damaged and that’s when they would detect that the tires are either fake or smuggled.
Though the Philippines is pushing for an increase in manufacturing in the country, Bridgestone and Good Year are doubtful in investing as it is hard to compete with manufacturing in Japan as well as the need for a “bigger market” to ensure the success of putting up facilities.
At present, the sole tires company which has a manufacturing arm in the country is Yokohama tires.
“But I wouldn’t call them manufacturing [for the Philippines]… Actually, 95 percent of their production are export. It is not so attractive to put up a manufacturing plant here in the Philippines,” Tagle said.
Bridgestone, the world’s largest tire company, has three or more manufacturing facilities in Thailand and five or more in Japan.
Bridgestone distributors for the country are Japan for high-end class A vehicles, and Thailand and Indonesia for general use tires.