SECTION 5
Tyre Supply Chains and Market Failure
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5 Tyre Supply Chai ns and Market Failure
This section of the report presents quantifiable data for the total tyre market (new tyres supplied into the
markets) and the three major supply chains, being tyres imported by consignment (tyre importers), tyres
imported on vehicles (vehicle importers); and domestically manufactured tyres (tyre manufacturers). The
section goes on to discuss the nature of the disposal arrangements of tyres from new vehicle dealers
representing vehicle manufactures that are members of the Federal Chamber of Automotive Industries
(FCAI). The section then concludes by discussing whether or not the market failures as identified in
Section 4 apply to a different extent to any of the tyre supply chains and if so to what extent.
FCAI represent the following vehicle manufactures and importers: Alfa Romeo, Audi, Bentley, BMW,
Chrysler-Jeep, Citroen, Daihatsu, Ferrari, Fiat, Ford, GM Holden Ltd, Honda, Hyundai, Jaguar, Kia, Land
Rover, Lexus, Maserati, Mazda, Mercedes-Benz, Mini, Mitsubishi, Nissan, Peugeot, Proton, Porsche,
Renault, Rolls-Royce, Saab, Smart, SsangYong, Subaru, Suzuki, Toyota, Volkswagen, Volvo. These
brands manufacture and import predominately passenger vehicles
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and SUVs
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.
A number of these brands manufacture vehicles in Australia as well as import, such as Ford, GM Holden
Ltd, Mitsubishi and Toyota, however, the majority of the brands import all vehicles.
FCAI also represents the following motor cycle manufactures Aprilia, BMW Motorcycles, BRP Australia
Pty Ltd, Ducati, Harley Davidson, Honda MPE, Kawasaki, Paul Feeney Group, Polaris, Suzuki and
Yamaha. It is understood that FCAI do not represent truck and bus manufactures.
By their very nature vehicles entering the market in Australia include OEM tyres. All imported vehicles
are fitted with tyres at the point and country of manufacture. The majority of domestic manufactured
vehicles are fitted with domestic tyres, however, some domestic vehicles are fitted with imported loose
tyres, particularly high performance tyres.
5.1 Overview of the Tyre Supply Chains
5.1.1 Current Tyres in Use
There are an estimated 74.3 million tyres (approximately 130 million EPUs) currently in use (estimates
derived from the ABS Motor Vehicle Census 2005 (ABS 2005) as well as updating of data gained from
an earlier consultative process (URS 2005)) (Table 5-1). In terms of total tyres in use, passenger vehicle
tyres account for 74 percent of all tyres, while light commercial tyres make up 16 percent of the total
market in tyres. The remainder of the tyre market consists of truck and bus, motorcycle, specialty and off
the road tyres. On a weight basis these proportions change, with passenger tyres contributing 42 percent,
truck and bus 24 percent, and off the road 14 percent of the total 1.235 million tonnes in use.
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Passenger vehicles include cars (small, medium and large), people movers, and sports cars
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Sports Utility Vehicles (compact, medium, large and luxury). Examples would be Range Rover and Toyota Landcruiser