International tyre brand not closing its factory in South Africa

For years, the tyre manufacturing sector in South Africa has faced existential threats, including illegal tyres, cheap Chinese imports, and difficult local trading conditions, but there is hope for manufacturers.

At a briefing by the Department of Trade, Industry and Competition on South Africa’s Automotive Master Plan, Numsa General Secretary Irvin Jim warned that the local manufacturing sector is facing contraction.

During the briefing, Jim spoke about the tyre manufacturing industry in particular, calling the situation “a job loss blood bath” and “a socio-economic catastrophe”.

“We lost the Bridgestone Plant in 2019 in Gqeberha and the Goodyear Plant last year, which employed 900 workers, and Continental Tyres has painted a bleak picture of its market outlook in the tyre sector,” he said.

“Sumitomo (Dunlop) in Ladysmith is also threatening retrenchments and is also facing a plant closure.”

Since these remarks, both Continental Tyre South Africa and Dunlop Tyres South Africa have clarified their local presence to TopAuto.

“Continental Tyre South Africa does not comment on rumours or third-party assertions regarding internal discussions,” a spokesperson for Continental told the publication.

The spokesperson explained that the company continuously reviews its operations to ensure long-term sustainability and remains committed to constructive engagement with employees and industry stakeholders.

Lubin Ozoux, CEO at Dunlop Tyres South Africa, noted that no announcements have been made regarding retrenchments at its uMnambithi (formerly Ladysmith) operation.

“As with all responsible businesses, we continuously assess and optimise our operations to ensure long-term sustainability,” he said.

Navigating a challenging environment

While the Continental spokesperson told TopAuto that the company is not in a position to provide further information, Ozoux provided an overview of the challenges in the sector.

He explained that the tyre industry operates within a complex global landscape where most brands have manufacturing facilities in countries where manufacturing is supported.

This is done through government incentives, reliable infrastructure, lower capital costs, access to advanced technology, and high local demand that enables economies of scale.

“In South Africa, manufacturers work within a different set of economic and operational conditions,” noted Ozoux.

“While there is strong local expertise and capability, factors such as infrastructure constraints, higher input and operating costs, and policy misalignment can make it more challenging to sustain and grow in comparison to tyres produced in highly supported environments.”

South Africa has also seen the growth of illicit and under-regulated tyre imports, which puts pressure on responsible manufacturers.

Not all local manufacturers have been spared from these challenges, with both Goodyear and Bridgestone closing plants in South Africa.

However, Dunlop has been somewhat spared from these, thanks to shareholders who invested significantly in the long-term sustainability of its local plant, including R1.7 billion in the last three years.

“We have also built strong relationships with the local community and local municipalities, which have made navigating infrastructure challenges more efficient and allowed us to start working constructively on long-term solutions,” said the CEO.

He noted that Dunlop remains committed to its local manufacturing operations and playing a meaningful role in the South African automotive value chain.

The company is currently focusing on understanding customer needs and meeting these while ensuring its operations remain both sustainable and competitive.

“We also want to work closer with the government to ensure that we find solutions to ensure that manufacturing in South Africa starts growing and creates the jobs that are needed,” Ozoux added.

Moving forward, South Africa needs to create a sustainable environment for tyre manufacturers already in the country, while the real proof of this will be in whether new tyre manufacturers enter the market.

“If we can get to that point, then we have achieved our goals as an industry.”