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10. Besides, the information was also collected from Original Equipment Manufacturers (OEMs), AITDF and Automotive Tyre Manufacturers' Association (ATMA).

11. A brief summary of the replies/information submitted by the tyre manufacturers to the DG is noted below:

J K Tyre & Industries Ltd. ('J K Tyre')

12. J K Tyre stated that it is engaged in the manufacturing and selling of tyres produced at the factories located in different parts of the country. It also stated that it imports tyres (Bias/Radial) for the purpose of testing, product evaluation, benchmarking etc. It further stated that it sells its products in different parts of the country through dealers and it does not enter into any written agreement with the dealers and goods are supplied to dealers under invoice which contains the terms and conditions of the sale. It was averred in the reply that natural rubber is procured domestically or through imports on daily basis. It also stated that the selling price is dependent on demand & supply, cost of production, competitive position of the company etc. It was submitted that the ex-factory price comprises of cost of production and the selling expenses. It was further stated that the OEMs are the bulk buyers and are in a position to dictate the prices based on purchase orders. It was stated that theprices dictated by the OEMs are arbitrary. It was also submitted that in comparison to the replacement market prices, the tyres are sold at a loss or marginal profit to OEMs.

Original Equipment Manufacturers (OEMs)

35. Information relating to import and pricing was collected by the DG from the major OEMs, viz. Tata Motors, Ashok Leyland and Eicher Motors (V E Commercial).It is noted from the information supplied that OEMs procure tyres from domestic tyre manufacturers and also import from various countries based on their requirement. The DG also noted that OEMs too are dependent on the supply of tyres from the domestic tyre manufacturers.

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215. It has been submitted that in an allegation of cartel, the condition precedent to pin down Ceat shall have to be existence of 'agreement including an action in concert'. In the absence of existence of an agreement among the tyre manufacturers, the other issues as highlighted by the DG in investigation report seem an academic exercise not relatable to the facts in issue. It has been submitted that the investigation report indicated discussions by Ceat and other tyre manufacturers at ATMA about OEM prices being un-remunerative. It has been further submitted that OEM market is a monopsony and is dominated by two major companies i.e. M/s Tata Motors Ltd. and M/s Ashok Leyland Ltd. In the OEM market, which is distinct and different from the replacement market, the two OEM bulk buyers are in a position to dictate the prices to the tyre manufacturers including Ceat after floating of tender, submission of price quotations, period of price negotiations and entering into contracts. It has been pointed out that the prices in the OEM market dictated by OEM buyers are much lower than the prices prevailing in the replacement market. In the replacement market, Ceat sells the product to the tyre dealers at the net dealer price and may also offer product discounts. Since the dealers are also dealing in competing products of other tyre manufacturers, Ceat in order to meet the inter-brand competition in the tyre industry gives product discounts to the tyre dealers.

Dependence of Customers

286. OEMs procure tyres from domestic tyre manufacturers and also import from various countries based on their requirement. As the penetration of radial tyres in Truck and bus segment has been pretty low it can be noticed that OEMs are dependent on the supply of cross ply tyres from the domestic tyre manufacturers.However, it is noted that the OEMs exert substantial countervailing buying power also because of the fact that the OEM demand constitutes around 26% for Commercial Vehicle tyres and 44% of total demand for domestic tyre industry. This fact has been reflected in submissions of various manufacturers also.