Город: Москва
Ваш регион
8 (800) 300-65-10
Город: Москва
Ваш регион
8 (800) 300-65-10

SA may hit Chinese tyres with heavy import duties – that will drive up fares, warns taxi industry

Major tyre manufacturers in South Africa are locked in a battle with Chinese imports and want government to impose heavy anti-dumping duties.

Tyres imported from China at lower prices continue to decimate local manufacturers, argued the South African Tyre Manufacturers' Conference in its bid for an investigation.

But additional import duties of between 8% and 69% will increase transport and freight costs, argues the Tyre Importers Association of South Africa.

These additional costs will be a burden to consumers, and taxi commuters stand to be the hardest hit, according to the National Taxi Alliance.

For more stories go to www.BusinessInsider.co.za.

The fight over Chinese tyres in South Africa is heating up, with the taxi and freight industries the latest to warn of price hikes if harsher import duties are imposed.

A battle is raging between South Africa's major tyre manufacturers and importers of Chinese rubber.

The push for anti-dumping duties, with the main argument being that cheap car, truck, and bus tyres from China have decimated the local industry, isn't new. The South African Tyre Manufacturers' Conference (SATMC) – made up of domestic tyre producers Continental, Bridgestone, Goodyear, and Sumitomo – has been fighting against Chinese imports for more than a decade.

The SATMC first applied to the International Trade Administration Commission (Itac) in 2005 for an anti-dumping investigation. The Itac ultimately found no wrongdoing and suspended its investigation, which was appealed by the SATMC and led to a six-year-long legal battle between the two, ending with no relief for local tyre manufacturers.

But the battle is far from over. The SATMC recently lodged another application with the Itac to investigate the alleged dumping of Chinese tyres in South Africa, with the commission confirming its probe into the matter at the end of January 2022.

The SATMC, according to a gazette published by South Africa's department of trade, industry, and competition, indicates "a decline in sales volumes, decline in output, decline in capacity utilisation, decline in market share, productivity, employment, and slowdown in growth" because of price undercutting.

There is fierce opposition to the SATMC's application, namely from the Tyre Importers Association of South Africa (TIASA). The importers argue that imposing additional duties of between 8% and 69% on passenger, taxi, bus, and truck vehicle tyres imported from China will have a devastating impact on South African consumers.

During the period under investigation by the Itac – August 2020 to July 2021 – R5.7 billion worth of tyres were imported into South Africa, with almost half coming from China. Charl de Villiers, chairperson of TIASA, argues that the SATMC's application is "absurd" when considering that, "according to their own price lists, the local manufacturers represented import 80% of the variety of tyres that they sell."

"The sad reality is that while this application makes no sense at all, it will, if successful, add a significant cost burden to motorists, taxi and bus operators and trucking and logistics companies," said De Villiers during a media briefing on Tuesday.

If additional anti-dumping duties are imposed, the cost of small passenger vehicle tyres can be expected to increase by at least 38%, while truck and bus tyres will rise by an average of 17%. The taxi industry will be the hardest hit, says TIASA, with the cost of tyres used by minibus vehicles set to soar by 41%.

"We already estimate that taxi fares need to rise by up to 30% due to rampant petrol price increases," said Theo Malele, spokesperson for the National Taxi Alliance.

"If tyres go up by 41%, it will have a devastating impact on our sector, and on commuters who rely on us to transport them to and from work. Government must intervene as a matter of urgency to reject SATMC's application for these duties immediately."

Similar concerns have been shared by the Road Freight Association (RFA), which is also opposing SATMC's bid, arguing that additional import duties "will translate into a 6% increase to operators."

"Transport companies already cannot afford the ever-rising operating and fuel costs, and so an increase in the cost of tyres could become the final nail in the coffin for many operators, leading to a collapse in the country's critical road freight logistics sector," said Gavin Kelly, CEO of the RFA.