Commission Regulation (EC) No 1999/2006 of 20 December 2006 imposing a provisional anti-dumping duty on imports of certain saddles originating in the People's Republic of China
Date: 2006-12-20
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, import, originating product, vehicle parts

28.12.2006

EN

Official Journal of the European Union

L 379/11

COMMISSION REGULATION (EC) No 1999/2006

of 20 December 2006

imposing a provisional anti-dumping duty on imports of certain saddles originating in the People's
Republic of China

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped
(‘the basic Regulation’), and in
imports from countries not members of the European Community (1)
particular Article 7 thereof,

Whereas:

1. Initiation

A. PROCEDURE

(1)

(2)

(3)

(4)

(5)

(6)

On 22 February 2006, the Commission received a complaint concerning certain saddles originating
in the People's Republic of China (PRC) lodged pursuant to Article 5 of the basic Regulation by the
European Saddle Manufacturers Association (the complainant) on behalf of producers representing a
major proportion, in this case 99 %, of the total Community production of certain saddles.

This complaint contained evidence of dumping and of material injury resulting there from, which
was considered sufficient to justify the opening of a proceeding.

On 7 April 2006, the proceeding was initiated by the publication of a notice of initiation in the
Official Journal of the European Union (2).

2. Parties concerned by the proceeding

importers, traders, users,
The Commission officially advised the exporting producers in the PRC,
suppliers and associations known to be concerned, representatives of the PRC and the complainant
Community producers and other Community producers known to be concerned of the initiation of
the proceeding. Interested parties were given the opportunity to make their views known in writing
and to request a hearing within the time limit set in the notice of initiation.

In order to allow exporting producers to submit a claim for market economy treatment (MET) or
individual treatment (IT),
if they so wished, the Commission sent claim forms to the Chinese
exporting producers known to be concerned. Three exporting producers groups and one individual
exporting producer requested MET pursuant to Article 2(7) of the basic Regulation, or IT should the
investigation establish that they do not meet the conditions for MET. It should be noted that three of
these exporting producers consisted of two or more related companies involved in the production
and/or sales of saddles.

In view of the apparent high number of exporting producers in the PRC, importers and producers in
the Community, in the notice of initiation, the Commission indicated that sampling may be applied
in this investigation for the determination of dumping and injury in accordance with Article 17 of
the basic Regulation.

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation (EC) No 2117/2005 (OJ L 340, 23.12.2005,

p. 17).

(2) OJ C 84, 7.4.2006, p. 4.

L 379/12

EN

Official Journal of the European Union

28.12.2006

(7)

In order to enable the Commission to decide whether sampling would be necessary and, if so, to
select a sample, all exporting producers in the PRC, Community importers and Community producers
were asked to make themselves known to the Commission and to provide, as specified in the notice
of
initiation, basic information on their activities related to the product concerned during the
investigation period (1 January 2005 to 31 December 2005).

(8)

As far as the exporting producers are concerned, given that only three groups of companies and one
individual company cooperated in the investigation, it was decided that sampling was not required.

(9) With regard to Community producers,

in accordance with Article 17 of the basic Regulation, a
sample was selected based on the largest representative volume of production of saddles in the
Community, which can reasonably be investigated within the time available. On the basis of the
information received from Community producers, the Commission selected five companies located in
two different Member States. In terms of production volume the five sampled companies represented
86 % of the total Community production. In accordance with Article 17(2) of the basic Regulation,
the parties concerned were consulted and raised no objection. In addition, the remaining Community
producers were requested to provide certain general data for the injury analysis. Furthermore, and in
accordance with Article 17 of the basic Regulation, a sample of importers was selected based on the
largest representative volume of imports of the product concerned into the Community which can
reasonably be investigated within the time available. On the basis of the information received from
various importers and considering the different quality of the information submitted, two importers
located in one Member State were selected for the sample. The two importers selected for the sample
represent 21 % of imports of the product concerned in the Community. In view of the small number
of responses received by users, it was decided that sampling of users was not necessary.

(10) Questionnaires were sent to all parties known to be concerned and to all other companies that made
themselves known within the deadlines set out in the notice of initiation. Replies were received from
four exporting producers in the PRC and one producer in the analogue country, Brazil. Full ques-
tionnaire replies were also received from the five Community producers selected in the sample.
Although four importers replied to the sampling form, only two cooperated by submitting a full
questionnaire reply. Moreover, four users of saddles returned a full questionnaire reply. In addition,
one questionnaire reply was also received from a raw material supplier.

(11)

The Commission sought and verified all the information deemed necessary for a provisional deter-
mination of dumping, resulting injury and Community interest and carried out verifications at the
premises of the following companies:

(a) Community producers

— Selle Royal S.p.A., Pozzoleone, Italy

— Selle Italia s.r.l., Rossano Veneto, Italy

— Bassano Selle s.r.l., Riese Pio X, Italy

— Selle SMP S.A.S., Casalserugo, Italy

— pph ABI sp.j., Nasielsk, Poland.

(b) Exporting producers in the PRC

— Cionlli Group

— Cionlli Bicycle (Taicang) Co., Ltd.

— Shunde Hongli Bicycle Parts Co., Ltd., Shunde

28.12.2006

EN

Official Journal of the European Union

L 379/13

— Safe Strong Bicycle Parts Shenzhen Co., Ltd., Shenzhen

— Cionlli Bicycle (Tianjin) Co., Ltd., Tianjin.

— Giching Group

— Giching Bicycle Parts (Shenzhen) Co., Ltd., Shenzhen

— Velo Cycle (Kunshan) Co., Ltd., Kunshan.

— Justek Group

— Jiangyin Justek Vehicle Co., Ltd., Jiangyin

— Jiangyin Justek Communication Equipment Co., Ltd., Jiangyin

— Tianjin Justek Vehicle Co., Ltd., Tianjin

— Viscount Vehicle (Shenzhen) Co., Ltd., Shenzhen.

(c) Related companies in the PRC and Taiwan

— Cionlli Bicycle (Tianjin) Co., Ltd, Tianjin

— Cionlli Industrial Co., Ltd.

(d) Unrelated importer in the Community

— Buechel GmbH, Fulda, Germany.

(12)

In view of the need to establish a normal value for exporting producers to which MET might not be
granted, a verification to establish normal value on the basis of data from an analogue country, Brazil
in this case, took place at the premises of the following company:

(e) Producer in Brazil

— Royal Ciclo Indústria de Componentes Ltda, Rio do Sul.

3. Investigation period

(13)

The investigation of dumping and injury covered the period from 1 January to 31 December 2005
(investigation period or IP). The examination of the trends relevant for the assessment of injury
covered the period from 1 January 2002 to the end of the investigation period (‘period considered’).

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

(14)

The product concerned is certain saddles and essential parts thereof (i.e. bases, cushions and covers),
of bicycles and other cycles (including delivery tricycles), not motorised, of cycles fitted with an
auxiliary motor with or without sidecars, of fitness machines and of home trainers, (‘the product
concerned’, or ‘saddles’) originating in the People's Republic of China. The product is normally
declared within CN codes 8714 95 00, ex 8714 99 90 and ex 9506 91 10.

L 379/14

EN

Official Journal of the European Union

28.12.2006

(15) A saddle is typically made up of three parts: a base or support on which the saddle is built, is
generally produced through a plastic injection moulding process; the cushion which is applied to the
base to make the saddle comfortable which can made from different types of synthetic foam or other
materials; the cover, made from synthetic material or natural leather which covers the cushion and
the edges of the base giving the saddle its feeling and aesthetical properties. As well as the above
three components a saddle normally incorporates an attaching mechanism made from metal such as
a fork, or clamp and may also include a spring or elastomer shock-absorbing mechanism.

(16)

The product concerned is used in bicycles and similar vehicles, as well as stationary appliances such
as fitness machines. The investigation has shown that, despite differences in shapes, materials and
production process, the different types of the product concerned all share the same basic physical and
technical characteristics and are basically used for the same purposes. They are therefore considered
to constitute a single product for the purpose of this proceeding.

2. Like product

(17)

The investigation showed that the basic physical and technical characteristics of the saddles produced
and sold by the Community industry in the Community, saddles produced and sold on the domestic
Chinese market and saddles imported into the Community from the PRC, as well as those produced
and sold in Brazil are the same and that these products have the same use.

(18)

It was therefore provisionally concluded that
Article 1(4) of the basic Regulation.

these products are alike within the meaning of

1. Market economy treatment (MET)

C. DUMPING

(19)

Pursuant to Article 2(7)(b) of the basic Regulation, in anti-dumping investigations concerning imports
originating in the PRC, normal value shall be determined in accordance with paragraphs 1 to 6 of the
said Article for those producers which were found to meet the criteria laid down in Article 2(7)(c) of
the basic Regulation.

(20)

Briefly, and for ease of reference only, the MET criteria are set out in summarised form below:

1. Business decisions and costs are made in response to market signals and without significant State

interference; and costs of major inputs substantially reflect market values.

2. Firms have one clear set of basic accounting records which are independently audited in line with

international accounting standards and are applied for all purposes.

3. There are no significant distortions carried over from the former non-market economy system.

4. Bankruptcy and property laws guarantee legal certainty and stability.

5. Exchange rate conversions are carried out at market rates.

(21)

Two groups of exporting producers and one individual exporting producer requested MET pursuant
to Article 2(7)(b) of the basic Regulation and replied to the MET claim form for exporting producers
within the given deadline. The Commission sought and verified at the premises of these companies
all necessary information submitted in the MET applications as deemed necessary. The investigation
revealed that the MET could only be granted to two group of exporting producers, whereas the claim
had to be rejected for one group of companies and the individual company.

28.12.2006

EN

Official Journal of the European Union

L 379/15

(22) With regard to the individual exporting producer, the investigation showed that the company did not
meet the requirements of the above-mentioned criteria 1 and 3. Namely, the company could not
demonstrate that its business decisions were taken in response to market signals, without significant
State interference, in particular as sales quantities in the domestic and export markets are restricted by
the Articles of Association of the company which cannot be changed without State approval.
Moreover, the company could not demonstrate that there are no distortions carried over from the
former non-market economy system,
in particular by providing written evidence concerning the
acquisition of the land use rights.

(23)

It

those exporting producers.

In addition, one group of exporting producers failed to declare their relationship with a major
domestic customer both in the reply to the market economy claim form and the response to the
anti-dumping questionnaire. The relationship was only uncovered by cross-checks made at the
premises of
is the Commission's consistent policy to make an
MET/IT determination for groups of related companies as a whole. Therefore granting MET/IT to
this exporter would have required the related company to fully cooperate in the investigation, in
order to establish its precise activities regarding the product concerned, the fulfilment of the MET
criteria and the influence of the relationship upon the transactions between the two companies. This
was not the case, since the related company did not cooperate in the investigation. Therefore, the
Commission was not in a position to make a MET/IT determination for this group of companies. It
should be noted that this issue affected a very substantial part of the exporters' domestic sales.
Moreover,
information and
documents submitted to the Commission. In view of this omission and its significance both in
terms of the MET analysis and of any dumping determinations that would be based on the individual
data submitted by this group of exporters,
it was determined that they had provided false and
misleading information within the meaning of Article 18 of the basic Regulation. The company
was informed forthwith of the basis on which it was intended to disregard the information provided
and was given the opportunity to provide further explanations, in accordance with Article 18(4) of
the basic Regulation. However, the explanations given by the company were unsatisfactory and could
neither convince the Commission that it did not submit misleading information nor resolve the
doubts about the integrity of the remaining data submitted by the company. As such, this group of
exporting producers was considered as not cooperating in the investigation and its request for MET
and IT was rejected.

this deliberate omission cast doubts on the reliability of other

(24)

The interested parties were given an opportunity to comment on the above findings.

(25) On this basis, MET was granted to two groups of exporting producers:

— Cionlli Bicycle (Taicang) Co. Ltd., and related companies

— Giching Bicycle parts (Shenzhen) Co. Ltd., and related companies.

2. Individual treatment (IT)

(26)

Pursuant to Article 2(7)(a) of the basic Regulation, a country-wide duty, if any, is established for
countries falling under that Article, except in those cases where companies are able to demonstrate
that they meet all criteria set out in Article 9(5) of the basic Regulation.

(27)

The exporting producer to which MET could not be granted also claimed IT in the event it was not
granted MET. However, the company's claim for individual treatment (IT) was also rejected as the
company failed to meet the criteria set out in Article 9(5)(b), namely that export prices and quantities
were freely determined.

L 379/16

EN

Official Journal of the European Union

28.12.2006

3. Normal value

(a) Determination of normal value for the exporting producers granted MET

(28) As far as the determination of normal value is concerned, the Commission first established, for each
of the exporting producers concerned, whether its total domestic sales of saddles were representative
in comparison with its total export sales to the Community. In accordance with Article 2(2) of the
basic Regulation, domestic sales were considered representative when the total domestic sales volume
of the exporting producer was at least 5 % of its total export sales volume to the Community.

(29)

The two groups of companies granted MET included five companies producing saddles for export,
three of which had also domestic sales. One further company had domestic sales but no exports.

(30)

For those exporting producers whose overall domestic sales were found to be representative, the
Commission subsequently identified the types of saddles sold domestically which were identical or
directly comparable to the types sold for export to the Community.

(31)

(32)

(33)

For each of those types, it was established whether domestic sales were sufficiently representative for
the purposes of Article 2(2) of the basic Regulation. Domestic sales of a particular type were
considered sufficiently representative when the total domestic sales volume of that type during the
IP represented 5 % or more of the total sales volume of the comparable type exported to the
Community.

The Commission subsequently examined for each company whether the domestic sales of each type
of the product concerned, sold domestically in representative quantities, could be regarded as having
been made in the ordinary course of trade pursuant to Article 2(4) of the basic Regulation, by
establishing the proportion of profitable sales to independent customers on the domestic market of
the type in question.

In cases where the sales volume of a type of saddle, sold at a net sales price equal to or above its cost
of production, represented more than 80 % of the total sales volume of that type, and where the
weighted average price of that type was equal to or above its cost of production, normal value, by
product type, was based on the actual domestic price. This price was calculated as a weighted average
of the prices of all domestic sales of that type made during the IP, irrespective of whether these sales
were profitable or not.

(34) Where the volume of profitable sales of a type of saddle represented 80 % or less of the total sales
volume of that type, or where the weighted average price of that type was below its cost of
production, normal value, by product type, was based on the actual domestic price, which was
calculated as a weighted average of profitable sales of that type only, provided that these sales
represented 10 % or more of the total sales volume of that type.

(35)

Finally, where the volume of profitable sales of any type of saddle represented less than 10 % of the
total sales volume of that type, it was considered that this particular type was sold in insufficient
quantities for the domestic price to provide an appropriate basis for the establishment of the normal
value.

(36) Wherever domestic prices of a particular type sold by an exporting producer could not be used,

constructed normal value was used.

28.12.2006

EN

Official Journal of the European Union

L 379/17

(37)

In accordance with Article 2(3) of the basic Regulation, normal value was constructed by adding to
each exporter's manufacturing costs of the exported types, adjusted where necessary, a reasonable
amount for selling, general and administrative costs (SG&A) and for profits. In all cases SG&A and
profits were established pursuant to the methods set out in Article 2(6) of the basic Regulation. To
this end, the Commission examined whether the SG&A costs incurred and the profit realised by each
of the exporting producers concerned on the domestic market constituted reliable data.

(38) Actual domestic SG&A costs were considered reliable when the total domestic sales volume of the
company concerned could be regarded as representative as compared to the volume of export sales
to the Community. The domestic profit margin was determined on the basis of domestic sales of
those types that were sold in the ordinary course of trade. For this purpose, the methodology set out
above was applied.

(39)

For the three companies with representative domestic sales it was found that the majority of types of
the product concerned, which were exported, were sold on the domestic market in the ordinary
course of trade. For those types where this was not the case, normal value was constructed using the
methodology set out above, using the SG&A and profit information for each company concerned.

(40)

For the two companies without representative domestic sales, the amounts for SG&A and profit were
determined on the basis of the average SG&A and profit of the four companies with domestic sales.

(b) Determination of normal value for the exporting producers not granted MET

(i) A n a l o g u e c o u n t r y

(41) According to Article 2(7)(a) of the basic Regulation, normal value for the exporting producers not
granted MET, has to be established on the basis of the prices or constructed value in an analogue
country.

(42)

In the notice of initiation, the Commission indicated its intention to use Brazil as an appropriate
analogue country for the purpose of establishing normal value and interested parties were invited to
comment on this.

(43) No exporting producers in the PRC not granted MET objected to this proposal.

(44) However, an importer and an exporting producer granted MET have argued that Brazil is not the
most appropriate analogue country, and that Taiwan or Mexico should be selected for that purpose
instead.

(45)

Regarding Taiwan, it is considered that although a bicycle parts industry had developed there, most of
the production has been transferred to the PRC. Accordingly, saddle manufacturers headquartered in
Taiwan would be largely the same companies or related companies to the ones which are exporting
from the PRC to the Community at allegedly dumped prices. Moreover, the normal division of labour
within those groups means that only a few specialised models, with higher profit margins, are still
produced in Taiwan, while the production of the vast majority of middle-range to lower-end models
have been transferred to the PRC for cost reasons. It is not likely, therefore, that prices or costs of
saddle models manufactured in Taiwan would be the best surrogate to base a normal value for the
saddles manufactured in the PRC.

(46)

Regarding Mexico, this country is considered to be an open and competitive market, representing
about one eighth of the size of the Brazilian market. The Commission contacted the two known
producers in Mexico, but no cooperation was offered.

L 379/18

EN

Official Journal of the European Union

28.12.2006

(47)

(48)

(49)

(50)

Regarding Brazil, the investigation revealed that it is a competitive market for the product concerned
with at least three domestic producers, of different sizes, and with imports from third countries
amounting to about 15 % of the domestic consumption of eight to nine million saddles per year.
One exporting producer alleged that the level of competition on the Brazilian market was dubious
due to the low number of producers. However, the investigation showed that there was no evidence
of a dominant position of one of the Brazilian producers or that prices are established in a non-
competitive manner. There was also no reason to believe that the access to raw materials, costs and
other conditions of production in Taiwan or Mexico would be more similar to those in the PRC than
they are in Brazil. The Brazilian market was therefore deemed adequate for the purpose of estab-
lishing normal value.

The three known exporting producers in Brazil were contacted, and one company agreed to co-
operate. A questionnaire was therefore sent to this producer and the data submitted in its reply was
verified on the spot. This cooperating producer is related to one of the Community producers, but
there is no reason to believe that this would affect the reliability of the data, which was moreover
verified at the company's premises.

In view of the foregoing,
reasonable analogue country in accordance with Article 2(7) of the basic Regulation.

it is provisionally concluded that Brazil

is the most appropriate and

(ii) N o r m a l v a l u e

Pursuant to Article 2(7)(a) of the basic Regulation, normal value for the exporting producers not
granted MET was established on the basis of verified information received from the producer in the
analogue country, i.e. on the basis of prices paid or payable on the Brazilian market for comparable
product types, in accordance with the methodology set out above.

(51) Normal value was established on the basis of all prices paid or payable on the Brazilian market for
comparable product types, as the transactions were all found to be made in the ordinary course of
trade.

4. Export prices

(52) All exporting producers made export sales to the Community either directly to independent
customers in the Community or through related or unrelated trading companies located in Hong
Kong, the British Virgin Islands and Taiwan.

(53) Where the product concerned was directly exported to independent customers in the Community,
the export prices were based on the prices actually paid or payable for the product concerned, in
accordance with Article 2(8) of the basic Regulation.

(54) Where sales were made via a related trader located outside the Community, the export price was
established on the basis of the first resale prices to independent customers in the Community.

5. Comparison

(55)

The normal value and export prices were compared on an ex-works basis. For the purpose of
ensuring a fair comparison between the normal value and the export price, due allowance in the
form of adjustments was made for differences affecting prices and price comparability in accordance
with Article 2(10) of the basic Regulation. Appropriate adjustments concerning transport, insurance,
handling and ancillary costs, packing, credit, and bank charges were granted in all cases where they
were found to be reasonable, accurate and supported by verified evidence.

28.12.2006

EN

Official Journal of the European Union

L 379/19

(56)

For the sales channelled through related companies in Taiwan, an adjustment was applied in
accordance with Article 2(10)(i) of the basic Regulation, where these companies have been shown
to perform functions similar to that of an agent working on a commission basis. Given that the
allocation of SG&A expenditure provided by the related company could not be considered reliable,
this adjustment was based on the SG&A and profit data obtained from an unrelated trader.

(57)

(58)

6. Dumping margins

(a) For the cooperating exporting producers granted MET

For the companies granted MET, the weighted average normal value of each type of the product
concerned exported to the Community was compared with the weighted average export price of the
corresponding type of the product concerned, as provided for in Article 2(11) and (12) of the basic
Regulation.

It has been the consistent practice of the Commission to consider related exporting producers or
exporting producers belonging to the same group as one single entity for the determination of a
dumping margin and thus to establish one single dumping margin for them. This in particular
because individual dumping margins might encourage circumvention of anti-dumping measures,
thus rendering them ineffective, by enabling related exporting producers to channel their exports
to the Community through the company with the lowest individual dumping margin.

(59)

In accordance with this practice, the related exporting producers belonging to the same groups were
regarded as one single entity and attributed one single dumping margin which was calculated on the
basis of the weighted average of the dumping margins of the cooperating producers in the respective
groups.

(60) On this basis, the provisional weighted average dumping margins expressed as a percentage of the cif

Community frontier price, duty unpaid, are:

Company

Provisional dumping margin

Cionlli Bicycle (Taicang) Co. Ltd., Shunde Hongli Bicycle Parts Co. Ltd. and
Safe Strong Bicycle Parts Shenzhen Co. Ltd.

7,5 %

Giching Bicycle parts (Shenzhen) Co. Ltd. and Velo Cycle Kunshan Co. Ltd.

0 %

(b) For all other exporting producers

(61)

In order to calculate the country-wide dumping margin applicable to all other exporters in the PRC,
the Commission first established the level of cooperation. A comparison was made between the total
export quantities indicated in the questionnaire replies of the three cooperating exporting producers
and total dumped imports from the PRC, calculated as explained in recital 71. The percentage found
was 23 %. On this basis, the level of cooperation was deemed to be low.

(62)

It was therefore considered appropriate to determine the country-wide dumping margin as the
weighted average of:

— the dumping margin found for the cooperating exporter to which neither MET nor IT was

granted, and

L 379/20

EN

Official Journal of the European Union

28.12.2006

— the highest dumping margins for representative product types of the same exporter, since there
were no indications that the non-cooperating exporting producers dumped at a lower level.

(63) On this basis the country-wide level of dumping was provisionally established at 30,9 % of the cif

Community frontier price, duty unpaid.

1. Community production

D. INJURY

(64) Within the Community the product concerned is known to be manufactured by nine producers on
behalf of which the complaint was lodged. They are located in Italy, Poland, the United Kingdom and
Portugal and represent 99 % of the Community production during the IP.

(65)

Furthermore, there was at initiation stage only one known Community producer which was not
complainant. Taking into account the production volume of the nine complaining producers and the
non-complaining producer in the Community, the total production of the like product amounted to
16 165 936 pieces in the IP.

2. Community industry

(66)

The following Community producers supported the complaint:

— Selle Royal S.p.A., Pozzoleone, Italy with its related company:

— Brooks England Ltd., West Midlands, United Kingdom

— Selle Italia s.r.l., Rossano Veneto, Italy with its related company:

— Bassano Selle s.r.l., Riese Pio X, Italy

— Selle SMP S.A.S., Casalserugo, Italy

— pph ABI sp.j., Nasielsk, Poland

— Iberoselle Fabrica de Selins Lda., Agueda, Portugal

— Selle Montegrappa s.n.c., Ramon di Loria, Italy

— Selle San Marco S.p.A., Rossano, Italy.

(67) As these nine complainant cooperating Community producers (both the sampled and non-sampled)
represent 99 % of the Community production of the like product, they constitute the Community
industry within the meaning of Articles 4(1) and 5(4) of
the basic Regulation. The sampled
Community producers in the investigation, (hereafter referred to as ‘sampled producers’) accounted
for 86 % of the total Community production of saddles during the IP. The remaining Community
producers were requested to provide certain general data for the injury analysis.

28.12.2006

EN

Official Journal of the European Union

L 379/21

3. Community consumption

(68)

The Community consumption was established on the basis of the sales volumes on the Community
market by the five sampled Community producers, the four Community producers which were not
included in the sample, the non-complaining producer in the Community and imports from the PRC
and from other third countries under the relevant CN codes according to Eurostat. As mentioned in
recital 14 the product concerned is presently declared within CN codes 8714 95 00, ex 8714 99 90
and ex 9506 91 10. The Eurostat data concerning the latter two CN codes (ex 8714 99 90 and
ex 9506 91 10) comprise also other parts of bicycles and exercising apparatus. As it was not
possible to retrieve from these two broader categories the data for saddles only, it was decided to
establish the import statistics only on the basis of one CN code, namely CN codes 8714 95 00. As a
consequence, the import volumes considered for the establishment of the Community consumption
may be slightly understated.

(69) On the basis of these data, it was found that over the period considered, consumption increased by

17 % from 20 701 027 pieces in 2002 to 24 179 012 pieces in 2005.

Table 1

2002

2003

2004

2005 (IP)

Community consumption (pieces)

20 701 027

21 688 470

23 357 359

24 179 012

Index

100

105

113

117

4. Imports of saddles from the PRC

(a) Margin of dumping and volume of imports and market share

(70) As indicated earlier, the present investigation has shown that average dumping margins established
for the PRC are above the de minimis threshold as defined in Article 9(3) of the basic Regulation, and
that the volume of imports from the PRC is not negligible in the sense of Article 5(7) of the basic
Regulation.

(71)

(72)

Import volumes were established on the basis of Eurostat data. As mentioned above in recital 68, the
import data given below may be slightly understated. Furthermore, Eurostat provides statistics
concerning import volumes of bicycle saddles in quantities of 100 kg and not in pieces. It was
therefore considered as appropriate to use 500 grams per piece as the average weight of imported
saddles from China as this weight was reported by one exporting producer and one unrelated
importer.

Imports from the PRC more than quadrupled over the period considered. In fact, they increased from
1 416 814 pieces in 2002 to 6 276 749 pieces in the IP. Correspondingly,
the market share
increased from 7 % in 2002 to 26 % during the IP. This has to be seen against the background
of a consumption which augmented by only 17 %, i.e. relatively less than the increase of imports
from the PRC.

(73) One unrelated importer alleged that import statistics were overestimated because an average weight
of 400 grams per piece of saddles was used in the complaint. The company claimed that the average
weight of saddles imported from the PRC would be between 600 and 800 grams. However, the same
company confirmed during the verification visit which took place at its premises that the average
i.e. exactly the weight used by the
weight of imported saddles from the PRC was 500 grams,
Commission for the conversion of Eurostat data given in 100 kg into pieces. This importer also
argued that the import statistics from the PRC were inflated because they included also imports of
saddles cover coats which are used for the protection of saddles. As mentioned above in recital 71,
the import statistics were based on only one CN code, (CN 8714 95 00) which is not the one under
which seat covers are normally declared and therefore the claim of the importer is unfounded.

L 379/22

EN

Official Journal of the European Union

28.12.2006

Table 2

2002

2003

2004

2005 (IP)

Imports (pieces)

1 416 814

2 048 240

4 351 842

6 276 749

100

7 %

145

9 %

307

19 %

443

26 %

Index

Market share

(b) Prices

(74)

The weighted average price of imports of saddles originating in the PRC decreased steadily each year
throughout the period considered and overall by 21 %, i.e. from EUR 1,4 per piece to EUR 1,1 per
piece between 2002 and the IP.

Table 3

2002

1,4

100

2003

1,3

91

2004

1,1

75

2005 (IP)

1,1

79

Weighted average cif Community
frontier price (EUR/piece)

Index

(c) Undercutting

(75)

(76)

(77)

(78)

For the determination of price undercutting, the Commission analysed data referring to the IP. The
relevant sales prices of the Community industry were those to independent customers, adjusted where
necessary to an ex-works level, i.e. excluding freight costs in the Community and after deduction of
discounts and rebates. Prices for the different types of saddles, defined according to base, cushion,
cover, fork and weight, were compared with the sales prices of similar types charged by the exporters,
net of discounts, and adjusted, where necessary, to cif Community frontier with an appropriate
adjustment for the customs duties (1,2 %) and post-importation costs, as incurred by an importer
in the Community.

For the calculation of weighted average undercutting margins, export prices of cooperating exporting
producers were taken into consideration. During the IP, the weighted average undercutting margin of
cooperating producers amounted to 67,3 %. Moreover, taking into account all imports of saddles, i.e.
those of cooperating and non-cooperating exporting producers in the PRC, the calculation of the
average undercutting margin based on Eurostat data showed a similar average undercutting margin of
70,1 % for the IP.

5. Situation of the Community industry

In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped
imports on the Community industry included an evaluation of all economic factors having a bearing
on the state of the Community industry during the period considered.

This analysis was carried out for the sampled companies. However, in order to provide a complete
picture of the situation of the Community industry, for those indicators for which reliable infor-
mation was available for the Community industry as a whole, this information has also been
provided below. On this basis, the industry's performances as measured by factors such as prices,
wages, investments, profits, return on investment, cash flow and ability to raise capital have been
established on the basis of information provided by the sampled companies. The injury factors such
as market share, sales volume and production have been established for the full Community industry.

28.12.2006

EN

Official Journal of the European Union

L 379/23

(a) Production

(79)

The production volume of the whole Community industry showed a clear negative trend over the
period considered. Whereas in 2002 the production volume amounted to 19 546 740 pieces of
saddles, during the IP, the Community industry produced only 16 165 936 pieces, which is almost
3,5 million pieces or 17 % less than in 2002. As saddles are in general only produced upon orders
received from customers, the negative development of the production volume can be directly linked
to the declined demand for saddles produced by the Community industry.

Table 4

2002

2003

2004

2005 (IP)

Production (pieces)

19 546 740

19 022 491

17 698 103

16 165 936

Index

100

97

91

83

(80)

(81)

(b) Capacity of production and capacity utilisation rates

The production capacity was established on the basis of the nominal capacity of the production units
owned by the Community industry, taking into account interruptions in production as well as the
fact that in some few cases part of the capacity had been used for other products manufactured, e.g.
handle bars for wheel chairs, with the same production lines.

The saddles production capacity increased by 5 % over the period considered from 29 492 120
pieces in 2002 to 30 921 920 pieces in the IP. The slight increase in production capacity results
from investments made in 2004 and in the IP for the production of some new product types which
are used for racing bicycles. The capacity utilisation rate mirrors the decline in production and
demand. It steadily decreased during the period considered reaching only a 45 % utilisation in the IP.

Table 5

2002

2003

2004

2005 (IP)

Capacity of production (pieces)

29 492 120

29 215 880

29 354 000

30 921 920

Index

Capacity utilisation

100

60 %

99

59 %

100

53 %

105

45 %

(c) Stocks

(82) As far as end of year stocks are concerned, the vast majority of production is made in response to
orders. Therefore, whilst a decrease in stocks of 35 % was observed over the period considered, it is
considered that in this case stocks were not a relevant indicator of injury.

Table 6

2002

2003

2004

2005 (IP)

Stocks (pieces)

1 365 040

1 192 612

1 000 376

884 829

Index

100

87

73

65

L 379/24

EN

Official Journal of the European Union

28.12.2006

(d) Investments

(83)

Between 2002 and 2003, investments for the production of the like product diminished from EUR
3 808 057 to EUR 1 664 147. In 2004 the Community producers stepped up their investments and
spent almost double the amount, i.e. EUR 3 381 996 compared to the previous year. During the IP
investments amounted to 3 638 962 which is 4 % lower than the level reached at the beginning of
the period considered in 2002. During the investigation it was found that investments in buildings,
plants and machinery were mainly made to maintain the production capacity and, only in 2004 and
the IP, to a lesser extent, to develop new product types. In view of the low capacity utilisation
mentioned before, investments were in any case not made with the purpose to increase the overall
production volume.

(84)

The investigation revealed that the Community industry is considered as the world leader concerning
product design, and innovation of saddles. Between 2000 and the IP, the Community producers
designed and marketed over one thousand new types of saddles. R&D accounts for approximately
8 % to 10 % of turnover of the Community industry. In order to keep this position, the Community
industry needs to maintain a certain level of investment, even if capacity utilisation is low.

Table 7

2002

2003

2004

2005 (IP)

Investments (EUR)

3 808 057

1 664 147

3 381 996

3 638 962

Index

100

44

89

96

(e) Sales volume and market share

(85)

There are two main sales channels for saddles: the original equipment manufacturer (OEM) market
and the ‘after market’. In the first case, saddles are sold to be put on a new bicycle and, in the second
case saddles are sold in order to replace a used bicycle saddle. It was found that OEM sales account
for approximately 60 % and after market sales for approximately 40 % of the total market. Like tyres,
saddles are those components of a bicycle which are replaced most frequently.

(86)

Sales volumes of the whole Community industry declined by 20 % over the period considered from
15 109 569 pieces to 12 139 162 pieces in the IP, i.e. the Community industry sold almost three
million saddles less in the IP than during 2002. After a small decrease of 1 % in 2003 compared to
2002, the loss in sales volumes was more pronounced in 2004 and the IP.

(87)

In terms of value, over the whole period considered sales of saddles by the Community industry
increased only by 1 %. Sales value on the Community market
increased by 5 % from EUR
54 460 180 in 2002 to EUR 56 978 530 in 2003 and then further to EUR 58 052 609 in 2004.
However, during the IP, the Community industry's sales value decreased by almost EUR three million
as compared to the previous year. The fact that sales in value did not develop along the same trend
as sales in volume is explained by an increase in average prices which will be explained below.

(88)

Corresponding to the decline in sales volumes, the Community market share also went down
significantly from 81 % in 2002 to 58 % in the IP. In other words, the Community industry lost
23 percentage points of its market share over the whole period considered to increasing imports
from the PRC.

28.12.2006

EN

Official Journal of the European Union

L 379/25

Table 8

2002

2003

2004

2005 (IP)

Sales value (EUR)

54 460 180

56 978 530

58 052 609

55 228 738

Index

100

105

107

101

Sales in the EC (pieces)

15 109 569

15 024 427

13 803 151

12 139 162

100

81 %

99

77 %

91

67 %

80

58 %

Index

Market share

(f) Prices

(89)

(90)

The Community industry's average unit selling price increased by 25 % over the period considered.
This price increase can be explained, on the one hand, as a result of the increased cost of raw
material, which impacted the whole industry and, on the other hand, by a shift from low tech to high
tech product types which incorporate more expensive raw materials and whose production is also
more labour intensive.

The main raw materials used for the production of saddles include plastic shells, coverings, poly-
urethane, rails and clamps. The prices of these raw materials are indirectly related to the development
of the oil price and metal prices. The raw material
is a major cost driving component in the
production cost of saddles accounting for approximately half of the total production cost and has
a direct impact on the sales price evolution.

(91)

It was found that average prices of raw materials remained stable between 2002 and 2003, but
increased from 2003 and also during the IP, which was reflected in the higher sales prices of the
Community industry

(92) One unrelated importer alleged that the rise of prices of the Community industry was a result of a
change in consumer demand. The company argued that the demand for low price bicycles and
accordingly low price saddles has declined whereas the demand for more expensive high quality
saddles has increased. This statement is contradicted by the fact that low priced imports from the
PRC increased in relative terms considerably more that the overall consumption of saddles in the
Community as stated in recital 72.

Table 9

Weighted average price (EUR/piece)

Index

2002

3,6

100

2003

3,8

106

2004

4,2

117

2005 (IP)

4,5

125

(g) Profitability and cash flow

(93) During the period considered the weighted average profitability on net turnover of the Community
industry decreased sharply from 3,8 % in 2002 to only 0,4 % in the IP. Whereas profitability
increased to 5,0 % in 2003, it dropped to 3,1 % in 2004 and reached finally 0,4 % during the IP.
The low profit margin is a consequence of the fact that the Community industry was unable to
sufficiently pass on the price increase in raw materials to its customers.

L 379/26

EN

Official Journal of the European Union

28.12.2006

Table 10

Pre-tax profit margin

2002

3,8 %

2003

5,0 %

2004

3,1 %

2005 (IP)

0,4 %

The Community industry generated a cash flow of EUR 3 990 473 during the IP which was approxi-
mately EUR 1,1 million or 22 % lower than in the year 2002. The still substantial amount of
liquidity of the Community industry is explained by the fact that it is a capital intensive industry
which requires high depreciation amounts. In general,
it could be seen that the liquidity of the
Community industry developed in a similar trend as profitability.

Table 11

2002

2003

2004

2005 (IP)

Cash flow (EUR)

5 084 871

6 655 555

6 574 821

3 990 473

Index

100

131

129

78

(h) Return on net assets

(94)

The return on net assets was calculated by expressing the pre-tax net profit of the like product as a
percentage of the net book value of fixed assets allocated to the like product. This indicator followed
a similar trend as profitability, decreasing from 12 % in 2002 to only 1 % in the IP.

Table 12

Return on net assets

2002

12 %

2003

16 %

2004

10 %

2005 (IP)

1 %

(i) Ability to raise capital

(95)

There was no claim from the Community industry nor indication that it encountered problems to
raise capital for its activities and it was therefore concluded that the Community industry, as a whole,
was in a position to raise capital for its activities throughout the period considered.

(j) Employment and wages

(96)

Employment in the Community industry remained stable over the whole period considered. After a
small increase in 2003 and 2004, the Community industry employed 418 people on a full time basis
during the IP, i.e. almost the same number as in 2002. However, it is noted that all Community
producers outsource substantial parts of their production to other small and medium sized enter-
prises located in the Community and, in a few cases, almost the entire production process to other
small and medium sized enterprises. Therefore, the total amount of people employed on a full time
basis in the production of saddles is much higher than the number of employees directly employed
by the Community industry. It is estimated that the total number of employees working in the
production of the like product is at least three times higher, i.e. approximately 1 200 people during
the IP. Average annual wages developed along the same trend as labour cost, i.e. they increased by
5 % over the period considered from EUR 7 784 339 in 2002 to EUR 8 190 911 in the IP, which is
below the inflation rate in the Community during the same period.

28.12.2006

EN

Official Journal of the European Union

L 379/27

Employees

Index

Table 13

2002

421

100

2003

434

103

2004

456

108

2005 (IP)

418

99

Labour cost (EUR/year)

11 427 812

12 136 974

12 319 136

12 121 976

Index

100

106

108

106

Wages (EUR/year)

7 784 339

8 136 410

8 428 090

8 190 911

Index

100

105

108

105

(k) Productivity

(97)

Productivity measured in output (production) per employee per year amounted to 42 225 pieces in
2002 and declined steadily over the years to 33 317 pieces in the IP. This decrease is caused by the
decreasing production volume.

Table 14

2002

2003

2004

2005 (IP)

Productivity (pieces/employee)

42 225

39 752

34 388

33 317

Index

100

94

81

79

(l) Growth

(98) While Community consumption increased by 17 % between 2002 and the IP, the sales volume of the
Community industry remained stable during the same period. Thus, sales by the Community industry
increased far less than the demand during the period considered. On the other hand, the market share
of imports from the PRC went up by 19 percentage points.

(m) Magnitude of the dumping margin and recovery from past dumping

(99) As concerns the impact on the Community industry of the magnitude of the actual margin of
dumping, given the volume and the prices of the imports from the PRC, this impact cannot be
considered negligible.

(100) The Community industry was not found to be recovering from the effects of past dumping or

subsidisation.

6. Conclusion on injury

(101) The analysis of the injury indicators revealed that the situation of the Community industry dete-
riorated significantly over the period considered. The majority of injury indicators (net sales in
volume, production volume, capacity utilisation, profitability, return on investments,
investments,
cash flow and employment) follow a negative trend over the period considered.

L 379/28

EN

Official Journal of the European Union

28.12.2006

(102) Still, some injury indicators show a stable development (net sales in value and ability to raise capital)
or, they even show a positive trend (average sales prices, production capacity and closing stocks).
However, the increase in sales prices and net sales value during IP cannot be attributed to an
improvement of the situation of the Community industry as such, but were a consequence of the
increased prices of raw materials and also a shift of the Community industry to the production of
higher value product types. As far as closing stocks are concerned, as mentioned in recital 82, in view
of the particularity of this industry, closing stocks cannot be considered as relevant for the determi-
nation of the injury.

(103) Given the vastly negative development of the profit-related indicators, the viability of the industry can
be considered to be at stake if this situation is not remedied. Indeed, as the Community industry
consists of small and medium sized enterprises and operates in a capital
intensive business, it is
highly unlikely that the Community industry could financially survive a longer period at this level.

(104)

In the light of the foregoing, it is concluded that the Community industry has suffered material injury
within the meaning of Article 3(5) of the basic Regulation.

1. Introduction

E. CAUSATION

(105)

In accordance with Article 3(6) and 3(7) of the basic Regulation, the Commission has examined
whether the dumped imports of the product concerned originating in the PRC have caused injury to
the Community industry to a degree that enables it to be classified as material. Known factors other
than the dumped imports, which could at the same time have injured the Community industry, were
also examined to ensure that possible injury caused by these other factors was not attributed to the
dumped imports.

2. Effect of the dumped imports

(106)

Imports from the PRC more than quadrupled over the period considered, i.e. they increased by 343 %
in terms of volume, and by 19 percentage points in terms of market share. At the same time, average
prices of all exporting producers in the PRC undercut the average Community industry prices by
70,1 % in the IP. The substantial increase in the volume of imports from the PRC and their gain in
market share during the period considered, at prices which were only a fraction of those of the
Community industry, coincided with the evident deterioration of the overall financial situation of the
Community industry during the same period.

(107) Whereas unit prices of imports from PRC steadily declined over the period considered by 21 % from
EUR 1,4 in 2002 to EUR 1,1 in the IP, the Community industry's prices increased over the same
period by 26 % from EUR 3,6 in 2002 to EUR 4,5 during the IP. This price development into
opposite directions can only partly be explained by a different product mix of saddles produced in
the Community and the PRC. Moreover, the Community producers have submitted evidence that the
access to and the prices of most raw materials are similar in the Community and the PRC. They have
also shown that the raw material cost of saddles in the Community increased over the period
considered. Indeed, some exporting producers in the PRC sell their products to the Community
below cost of the raw material and this clearly shows that this is not a situation where prices are
low because of a comparative advantage of the producers in the PRC, but because of the existence of
dumping practices.

(108) The effect of this unfair pricing behaviour of the dumped imports from the PRC was that the
Community industry's prices were suppressed and could not even cover the increase of cost of
raw materials. This was further confirmed by the significant reduction in profitability by the
Community industry.

28.12.2006

EN

Official Journal of the European Union

L 379/29

(109) Based on the above considerations, it is evident that the low-priced imports from the PRC which
significantly undercut the prices of the Community industry have had a determining role in the
deterioration of the situation of the Community industry, which is reflected in particular in the
decrease of production and sales volumes, market share, and in the sharp decrease of profitability.

3. Effect of other factors

(a) Non-dumped imports originating in the PRC

(110) For one exporting producer the dumping margin established was below the de minimis threshold.
Therefore, imports of this company were not considered in the injury analysis above. Of all imports
from the PRC, the imports of this exporting producer amounted to a range of 28 % up to 33 % in
the years 2002 and 2003, to a range between 18 % and 23 % in 2004 and reached a range between
12 % and 17 % in the IP. Average prices of this company still undercut those of the Community
industry significantly throughout the period considered. However, the average undercutting margins
of this company were much smaller than those of the companies for which dumping was found. In
view of the fact that imports from this company were not significant, and, even more important,
sharply decreased over the period considered, it is concluded that the non-dumped imports of this
exporting producer did not break the causal link, i.e. that dumped imports from the PRC caused
material injury to the Community industry.

(b) Imports originating in third countries other than the country concerned

(111) According to Eurostat and to the information collected during the investigation, the main third

countries from which saddles are imported are Taiwan, India and Vietnam.

(112)

Imports from Taiwan amounted 1 145 000 pieces in 2002 and increased over the period considered
by 25 % to 1 429 200 pieces in the IP. The market share of saddles imported from Taiwan amounted
to 6 % in 2002, i.e. the same level as in the IP. Taiwanese imports were made at prices at similar
levels of those of the Community industry. As the market share of Taiwanese imports did not
increase, but remained stable at 6 % over the period considered and prices were at the same level
as Community industry's prices, imports from Taiwan are not considered as having had a negative
effect on the situation of the Community industry.

(113)

Imports from India amounted to 204 200 pieces in 2002 and augmented by 30 % to 264 600 in the
IP. Average prices of imports from India stayed during the whole period considered well below the
level of imports from the PRC. They amounted to EUR 0,63 in 2002, then increased to EUR 0,91
EUR in 2003 after which they declined sharply to EUR 0,47 and reached EUR 0,6 in the IP.
However,
the whole period
considered. Therefore, it is concluded that despite the low price level of imports from India, these
imports did not have a significant effect on the situation of the Community industry.

these imports only represent a market share of 1 % throughout

(114) As to imports from Vietnam, Eurostat statistics show a very low level of 4 400 imported saddles in
2002 which augmented to 136 600 pieces in the IP. Prices of imports from Vietnam remained in the
same range as prices from the PRC. However, similar as in the case of India, the market share of
Vietnamese imports was below 1 % in 2002 and 2003 and merely reached 1 % in 2004 and the IP.
Thus,
it is concluded that these imports have not had a significant impact on the state of the
Community industry.

(115)

It can thus provisionally be concluded that imports other than from the PRC did not contribute to
the material injury suffered by the Community industry.

L 379/30

EN

Official Journal of the European Union

28.12.2006

(c) Infringement of intellectual property rights

(116) As mentioned earlier in recital 84, around 8 % to 10 % of the Community industry's turnover is
devoted to investments in R&D. These investments include posture studies, tests and the design of
new models of saddles. Some Community producers alleged that certain exporting producers from
the PRC simply copy the patented European products and are hence able to generate a cost advantage
compared to the producers in the Community which is reflected in the low price of saddles imported
from the PRC. On the other hand, one unrelated importer submitted that counterfeits were not only
originating from the PRC, but that they were also a cause of litigation among the producers in the
Community. It is acknowledged that counterfeiting is an important issue in this industry and may
indeed have aggravated the situation for the Community industry. In any event, the losses incurred by
infringement of intellectual property rights caused by the Community industry itself are not such as
to break the strong causal link between the surge of dumped imports and the material injury suffered
by the Community industry. It should also be noted that to the extent that dumped imports from the
PRC benefited from infringements of intellectual property rights, this could not be considered as
another factor as this infringement would still relate to the dumped imports.

4. Conclusion on causation

(117) The coincidence in time between, on the one hand, the increase in dumped imports from the PRC,
the increase in market shares and the undercutting found and, on the other hand, the evident
deterioration in the situation of the Community industry, leads to the conclusion that the dumped
imports caused the material injury suffered by the Community industry within the meaning of Article
3(6) of the basic Regulation. Other factors were analysed but found not to be a determining reason
for the injury suffered.

(118) Based on the above analysis, which has properly distinguished and separated the effects of all known
factors having an effect on the situation of the Community industry from the injurious effect of the
dumped imports, it is provisionally concluded that the imports of saddles from the PRC have caused
material injury to the Community industry within the meaning of Article 3(6) of the basic Regu-
lation.

F. COMMUNITY INTEREST

(119)

In accordance with Article 21 of
it was examined whether, despite the
conclusion on injurious dumping, compelling reasons exist for concluding that it is not in the
to adopt measures in this particular case. The likely impact of possible
Community interest
measures on all parties involved in the proceeding and also the consequences of not
taking
measures have to be considered in this respect.

the basic Regulation,

1. Community industry

(120) The injurious situation of the Community industry resulted from its difficulty to compete with the

low-priced, dumped imports.

(121) The imposition of measures should enable the Community industry to increase the volume of its
sales and to regain market share and thereby generating better economies of scale, thus achieving the
necessary profit level to justify continued investments in its production facilities and in research, to
remain competitive.

(122) One importer claimed that one Community producer had a dominant market position, however,
without substantiating this allegation. Given the fact that saddles were produced throughout the
period considered by at
least 10 different competing producers in the Community, and that
nothing was found in the course of the investigation to support this allegation, this claim is rejected.

28.12.2006

EN

Official Journal of the European Union

L 379/31

(123) Should measures not be imposed, the deterioration of the situation of the Community industry
would continue. It would not be able to invest in new technologies and to compete effectively
with imports from third countries.
the Community
industry would continue to be deprived from the big volumes of the market of medium range
saddles, therefore be unable to distribute its fixed costs. Indeed, some companies would have to
cease the production of the like product and lay off their employees, as was already the case of one
Community producer in 2005.
the imposition of anti-dumping
is therefore concluded that
measures is in the interest of the Community industry.

if measures are not imposed,

In addition,

It

2. Interest of unrelated importers

(124) As far as importers are concerned, only two unrelated importers replied to the questionnaire and a
verification visit was subsequently carried out to one of them. The volumes of the product concerned
imported by these two importers represented 21 % of the total imports in the Community from
China and 7 % of the Community consumption.

(125)

In view of the fact that the majority of all saddles imports into the Community are channelled
through importers which are not related to exporting producers, imports of these unrelated importers
were considered as representative for all other unrelated importers.

(126) For both importers, imports of the product concerned from the PRC represented 100 % of their total
imports of saddles. In the case of one importer, the corresponding sales value of saddles represented
8 % of the importer's total turnover during the IP. The sales of imported saddles from the PRC were
profitable during the IP. However, the profitability of the sales of saddles was 0,7 percentage points
below the overall profitability of this company which was in a range of approximately 2 % to 6 % in
the IP. In the case of the other importer, the sales value of imported saddles in the IP represented
only 1,2 % of the company's total turnover and the profitability of the sales of saddles was estimated
to be in line with the overall profitability of this company. It can be assumed from the information
submitted by other importers that the situation of these two described importers is representative for
most importers of saddles from the PRC.

(127) As both companies imported saddles only from the PRC, it can be concluded that the imposition of
measures may indeed have a negative effect on the financial situation of these companies. However,
taking into consideration that the sales of saddles only account for a minor share of the companies'
total turnover and profit, it is not expected that measures would have a significant financial impact
on the overall situation of these two importers. In addition, these companies could also import
saddles either from the group of companies for which zero dumping was found, or from other third
countries, e.g. Taiwan.

3. Interest of users

(128) Four users and distributors of the product concerned replied to the questionnaire sent by the
Commission. These are companies which use saddles produced in the Community and also
imported saddles for the assembly of bicycles. These four companies used a total amount of
1 255 655 saddles during the IP of which more than half (55 %) were saddles originating in the
PRC. The number of imported saddles from the PRC and used by the four companies represented
5,7 % of the sales volume of the Community industry and 2,9 % of the total consumption of saddles
in the Community during the IP. As far as the assemblers of bicycles are concerned, it was found that
saddles constitute only a minor cost component of the total cost of a finished bicycle. On average,
saddles account, depending on the model, for 1 % to 4 % of the total cost of a bicycle.

L 379/32

EN

Official Journal of the European Union

28.12.2006

(129) Two of the four users declared that the imposition of an anti-dumping duty would most likely not
have a big effect on their business because an increase in the price of saddles would possibly be
passed on to their final customer. Furthermore, they argued that the price difference between saddles
produced and sold by the Community industry and imports from China was such, that even after the
imposition of anti-dumping duties, saddles originating in the PRC would still remain competitive.

(130) The other two users did not provide a non-confidential version of their submission. Therefore, in line

with Article 19(3), such information was provisionally disregarded.

(131) One exporting producer claimed that the imposition of measures on imports of saddles was not in
the Community interest as it would put the existence of a viable European bicycle manufacturing
industry further at risk. The company argued that manufacturers in the Community would stop their
assembling business and instead start importing finished bicycles from the PRC despite the existence
of an anti-dumping duty on bicycles. In this respect,
it should be noted that exporters have no
standing with regard to the determination of the Community interest. Nevertheless, the substance of
the argument was examined. Given that two of the four users of bicycle saddles declared that the
imposition of measures would not have any substantial impact on their businesses because of the low
cost of a saddle in the overall cost of production of a bike the argument should in any event be
rejected.

(132)

In view of the fact that the four companies purchased an important part of saddles (45 % during the
IP) in the Community and given the relatively low importance of a saddle in the total cost of a fully
assembled bicycle, it is concluded that the impact on costs resulting from the imposition of anti-
dumping measures on saddles would not result in a significant impact in the overall costs of users. In
any event, should such impact occur it is highly likely that users of imported saddles will be able to
pass on the additional cost.

4. Interest of raw material suppliers and consumers

(133) One raw material supplier replied to the questionnaire. This company is selling the metallic parts of
saddles to producers in the Community, namely frames and springs which are made out of iron,
steel, titanium, vanadium, manganese or carbon-steel. The company is in favour of the imposition of
anti-dumping duties, as it expects production volumes of the Community industry to increase and
consequently a higher demand for its raw materials.

(134) On the basis of the above findings, and in the absence of any other element or reaction from
the proposed measures on the

is concluded that

the impact of

consumer organisations
consumers is not likely to be significant.

it

5. Conclusion on Community interest

(135) Following the above,

it is concluded that there are no compelling reasons on the grounds of

Community interest, why provisional anti-dumping duties should not be imposed.

G. PROVISIONAL ANTI-DUMPING MEASURES

1. Injury elimination level

(136)

In view of
the conclusions reached with regard to dumping, resulting injury, causation and
Community interest, provisional measures should be imposed in order to prevent further injury
being caused to the Community industry by the dumped imports.

28.12.2006

EN

Official Journal of the European Union

L 379/33

(137) The measures should be imposed at a level sufficient to eliminate the injury caused by these imports
without exceeding the dumping margin found. When calculating the amount of duty necessary to
remove the effects of the injurious dumping, it was considered that any measures should allow the
Community industry to cover its costs of production and to obtain overall a profit before tax that
could be reasonably achieved by an industry of this type in the sector under normal conditions of
competition,
in the
Community. The pre-tax profit margin used for this calculation was 5 % of turnover, based on
the profitability established in previous investigations for producers of bicycle parts which include
the Community producers as defined in recital 67.

in the absence of dumped imports, on the sales of

the like product

i.e.

(138) The necessary price increase was then determined on the basis of a comparison of the weighted
average import price, as established for the price undercutting calculations (see recital 75 above), with
the non-injurious price of products sold by the Community industry on the Community market. The
non-injurious price has been obtained by adjusting the sales price of the Community industry by the
actual
loss/profit made during the IP and by adding the above mentioned profit margin. Any
difference resulting from this comparison was then expressed as a percentage of the total cif
import value.

(139)

In order to calculate the country-wide injury elimination level for all other exporters in the PRC, it
should be recalled that the level of cooperation was low. Therefore, the injury margin was calculated
as a weighted average of the margin calculated for the cooperating exporter and the highest margins
established for representative types exported by the same exporter.

(140) The injury margins were significantly higher than the dumping margins found.

2. Provisional measures

(141)

In light of the foregoing, it is considered that a provisional anti-dumping duty should be imposed at
the level of the dumping margin found, but should not, in accordance with Article 7(2) of the basic
Regulation, be higher than the injury margin calculated above.

(142) The individual company anti-dumping duty rates specified in this Regulation were established on the
basis of the findings of the present investigation. Therefore, they reflect the situation found during
that investigation with respect to these companies. These duty rates (as opposed to the countrywide
duty applicable to ‘all other companies’) are thus exclusively applicable to imports of products
originating in the country concerned and produced by the companies and thus by the specific
Imported products produced by any other company not specifically
legal entities mentioned.
mentioned in the operative part of this document with its name and address,
including entities
related to those specifically mentioned, cannot benefit from these rates and shall be subject to the
duty rate applicable to ‘all other companies’.

(143) Any claim requesting the application of these individual company anti-dumping duty rates (e.g.
following a change in the name of the entity or following the setting up of new production or
sales entities) should be addressed to the Commission (1) forthwith with all relevant information, in
particular any modification in the company's activities linked to production, domestic and export
sales associated with, for example, that name change or that change in the production and sales
entities. The Commission, if appropriate, will, after consultation of the Advisory Committee, amend
the Regulation accordingly by updating the list of companies benefiting from individual duty rates. In
order to ensure a proper enforcement of the anti-dumping duty, the countrywide dumping margin
should also apply to those producers which did not have any exports to the Community during
the IP.

(1) European Commission, Directorate-General for Trade, Direction B, 1049 Brussels, Belgium.

L 379/34

EN

Official Journal of the European Union

28.12.2006

(144) On the basis of the above, the provisional duty rates are:

Cionlli Bicycle (Taicang) Co. Ltd., Shunde Hongli Bicycle Parts Co. Ltd. and
Safe Strong Bicycle Parts Shenzhen Co. Ltd.

7,5 %

Giching Bicycle parts (Shenzhen) Co. Ltd. and Velo Cycle Kunshan Co. Ltd.

0 %

All other companies

30,9 %

3. Special monitoring

(145)

In order to minimise the risks of circumvention due to the high difference in the duty rates, it is
considered that special measures are needed in this case to ensure the proper application of the anti-
the product concerned manufactured by the respective
dumping duties. Only the imports of
exporting producer can benefit
from the specific dumping margin calculated for the producer
concerned. These special measures include the following:

(146) The presentation to the customs authorities of the Member States of a valid commercial

invoice
which must conform to the requirements set out in the Annex to this Regulation. Imports not
accompanied by such an invoice must be made subject to the residual anti-dumping duty applicable
to all other companies.

(147)

It is recalled that should the exports by the companies benefiting from lower individual duty rates
increase significantly in volume after the imposition of the anti-dumping measures, such an increase
in volume could be considered as constituting in itself a change in the pattern of trade due to the
imposition of measures within the meaning of Article 13(1) of the basic Regulation.
In such
circumstances, and provided the conditions are met, an anti-circumvention investigation may be
inter alia, examine the need for the removal of individual duty
initiated. This investigation may,
rates and the consequent imposition of a country-wide duty.

H. FINAL PROVISION

(148)

In the interest of sound administration, a period should be fixed within which the interested parties
which made themselves known within the time limit specified in the notice of initiation may make
their views known in writing and request a hearing. Furthermore, it should be stated that the findings
concerning the imposition of anti-dumping duties made for the purposes of this Regulation are
provisional and may have to be reconsidered for the purpose of any definitive duty,

HAS ADOPTED THIS REGULATION:

Article 1

1.
A provisional anti-dumping duty is hereby imposed on imports of saddles and essential parts thereof
i.e., bases, cushions and covers, of bicycles and other cycles (including delivery tricycles), not motorised, of
cycles fitted with an auxiliary motor with or without sidecars, of fitness machines and of home trainers,
falling within CN codes 8714 95 00, ex 8714 99 90 and ex 9506 91 10 (TARIC codes 8714 99 90 81 and
9506 91 10 10) and originating in the People's Republic of China.

The rate of the provisional anti-dumping duty applicable to the net free-at-Community-frontier price,

2.
before duty, of the products manufactured by the companies below shall be:

28.12.2006

EN

Official Journal of the European Union

L 379/35

Company

Anti-Dumping Duty

TARIC Additional Code

Cionlli Bicycle (Taicang) Co. Ltd., Shunde
Hongli Bicycle Parts Co. Ltd. and Safe
Strong Bicycle Parts Shenzhen Co. Ltd.

Giching Bicycle parts (Shenzhen) Co. Ltd.
and Velo Cycle Kunshan Co. Ltd.

All other companies

7,5 %

0 %

30,9 %

A787

A788

A999

The application of the individual duty rates specified for the companies mentioned in paragraph 2
3.
shall be conditional upon presentation to the customs authorities of
the Member States of a valid
commercial invoice, which shall conform to the requirements set out in the Annex. If no such invoice is
presented, the duty rate applicable to all other companies shall apply.

The release for free circulation in the Community of the product referred to in paragraph 1 shall be

4.
subject to the provision of a security, equivalent to the amount of the provisional duty.

5.

Unless otherwise specified, the provisions in force concerning customs duties shall apply.

Article 2

Without prejudice to Article 20 of Council Regulation (EC) No 384/96,
interested parties may request
disclosure of the essential facts and considerations on the basis of which this Regulation was adopted, make
their views known in writing and apply to be heard orally by the Commission within one month of the date
of entry into force of this Regulation.

Pursuant to Article 21(4) of Regulation (EC) No 384/96, the parties concerned may comment on the
application of this Regulation within one month of the date of its entry into force.

Article 3

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the
European Union.

Article 1 of this Regulation shall apply for a period of six months.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 20 December 2006.

For the Commission

Peter MANDELSON
Member of the Commission

L 379/36

EN

Official Journal of the European Union

28.12.2006

ANNEX

The valid commercial invoice referred to in Article 1(3) of this Regulation must include a declaration signed by an official
of the company, in the following format:

(1) The name and function of the official of the company which has issued the commercial invoice.

(2) The following declaration:

‘I, the undersigned, certify that the [volume] of saddles sold for export to the European
Community covered by this invoice was manufactured by [company name and address] [TARIC additional code] in
the People's Republic of China. I declare that the information provided in this invoice is complete and correct.’