European Union imposes 5-year levy on Chinese aluminum wheels exporters

Article by Christian A., on October 26, 2010

A five-year tariff is being imposed by the European Union on Chinese exporters of aluminum car wheels as an effort to enable German, French, Italian and other EU producers to compete against cheaper imports. Already, this move is being seen to result to cost increases from carmakers.

Chinese exporters -- including YHI Manufacturing (Shanghai) Co. and Zhejiang Wanfeng Auto Wheel Co. -- are subject to the 22.3% duty because of a practice called dumping.

In this case, they have been selling the wheels in the 27-nation EU below cost. The customers for these wheels include car manufacturers such as BMW AG, the world’s biggest maker of luxury autos, and Renault SA.

According to the decision that the European Union made last Monday in Luxembourg, the dumped imports from China had resulted to the “material injury” of European aluminum-wheel producers including Borbet Solingen GmbH of Germany, Francaise de Roues and Italy’s Speedline Srl.

The five-year levy is actually higher than a 20.6% provisional duty of 20.6% unveiled in May. It’s expected to take effect after publication in the EU Official Journal by Nov. 11.

The bloc found that Chinese exporters had doubled their combined share of the EU market for aluminum wheels to 12.4% in the 12-month period through June 2009 compared with 2006.

According to the EU, the benefits of the anti-dumping duty for European aluminum-wheel producers exceed the disadvantages for carmakers. The EU added that with aluminum road wheels making up about 1% of a car’s price, automakers face a maximum cost increase of 0.22%. [via autonews - sub. required]

Topics: europe, china

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