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26. The decision of an important car manufacturer to open a 
factory in another country may result in an increase in the -ex- 
port of tyres from the country in which the parent car firm is 
operating and an increase in the import of tyres in the country 
in which the branch car factory has been established, although 
no real change in the volume of trade in tyres has resulted. Thus 
the sudden rise in French exports of tyres to England in 1926 was 
in part due to the establishment in England in that year 
of branch works of the Citroén car company. Michelin sup- 
plied the main Citroén works in France from its French factory 
and continued to supply the first equipment to Citroén cars manu- 
factured in England. As, however, Citroén cars had previously 
been arriving in England fitted with Michelin tyres, the additional 
exports of tyres from France to England, resulting from the 
change in place of delivery did not represent any true increase 
in the French export trade in tyres. Changes in the practice 
of shipping cars with or without tyres may have similar effects 
on the trade returns. 
27. In a different category come the variations in the trade re- 
surns caused by changes in stocks arising either from changes in 
the agencies of distribution or from changes in car design. 
28. The imminence of a tariff duty or an alteration in the rate 
of tariff may also temporarily affect the flow of exports and im- 
ports. Large shipments of tyres from the United States arrived 
in the United Kingdom too late to enter duty free when duties on 
tyres were imposed, in 1927, in the United Kingdom. These 
iyres were transferred to the Irish Free State which at that time 
was a free market. The imports of the Irish Free State were 
therefore temporarily inflated. 
29. Statistics of values of the exports of tyres are also affected 
in varying degree according to the extent to which the tyres ex- 
ported are shipped in fulfilment of ** first equipment '’ orders. 
** First equipment ’’ orders are important to tyre manufacturers, 
not only for the advertisement they afford, but as providing large 
running orders. It is customary therefore to supply *‘ first equip- 
ment *’ orders at prices below those for replacement. The differ- 
ence between the two scales of prices is probably greater in the 
United Kingdom and in the United States than in France. Where 
car manufacturers have established assembly plants in other coun- 
ries, the tyre manufacturer which supplies the parent company 
with *‘ first equipment *’ frequently holds the contract for supply- 
ing the foreign branch, either at the price charged for first equip- 
ment in the country of origin or at the lowest rate prevailing for 
first equipment business in the country in which the assembly 
works are situated. As first equipment prices are below those 
for replacement, the recorded value of exports from a country 
which is making large shipments for first equipment, will appear 
Effect of 
sranch 
factories 
on national 
trade 
statistics. 
Yffect of 
sransfers 
of stocks. 
Effect of 
imminence 
of tariff 
duties. 
Different 
value of 
“first 
equipment’ 
and * re- 
place- 
ments