Viewpoints: Giti director on TBR market, tariffs

That positive trend has continued into 2018, helped by supply issues with some other manufacturers, McHugh told ERJ in a 26 April interview at the Commercial Vehicle Show 2018 in Birmingham.

“I would love to say this is all because of our fantastic sales team and fantastic products,” he said. “But realistically, a big factor has also been the issues in the supply-chain, both for premium-tire and budget-tire manufacturers.”

Asked about plans for the rest of the year, McHugh said Giti is very much focused on a value-approach to the market for fleets: “That is where we see our future: more and more fleet engagements.”

In terms of customer trends, McHugh pointed to Giti’s introduction of tires to meet the latest EU noise regulations. These offerings, he said are “performing excellently in the marketplace.”

EU tariffs

Speaking just before the EU imposed provisional anti-dumping duties on Chinese TBR tires, McHugh said this situation was causing a lot of uncertainty in the market.

Many tires, he reckoned, had been sold and "probably purchased" already leaving some suppliers in the difficult situation of having to go back to customers saying ‘I need to charge you more’.

“This confusion is slowing the market [particularly at] the lower end where people bring in and sell by container,” he said.

Asked about Giti’s position as a supplier of truck tires into the EU from its Chinese facilities, McHugh said: “We will have to see what happens and what plans we can put into place.

Giti, he said, also operates plants in America and Indonesia, but at the moment, truck tires are supplied from its plants in China.

“You can have contingency plans, but they don’t happen overnight when you are talking about tires,” he added. “You can’t shut one factory down and open another up overnight: it doesn’t happen like that.”

In the long-term, the EU tariffs will “certainly be good for the retreader”, continued McHugh, noting that Giti has its own retread offerings.

“From that point of view, we will only see that sector grow as less and less Chinese tires come in to the market. It will make the retread much more attractive.

“We have seen growth already because I think the availability of other brands and the uncertainty is causing a few problems in the marketplace at present.”

But then there is the question about the impact tariffs after Brexit, McHugh concluding: “There are an awful lot of unknowns at the moment.”