The Tyre Importers Association of South Africa (TIASA) has warned that the cost of tyres could go up by as much as 41% if the SA Tyre Manufacturers Conference (SATMC) is successful in its duty application.
The SATMC comprises the four large tyre producers Bridgestone, Continental, Goodyear, and Sumitomo, who collectively applied to the International Trade Administration Commission (ITAC) to impose additional duties of between 8-69% on passenger, taxi, bus, and truck tyres imported from China.
If the application is successful, the cost of taxi tyres is set to increase by 41%, the cost of small passenger vehicle tyres is expected to increase by 38-40%, and truck and bus tyres by an average of 17%.
Charl de Villiers, Chairperson of TIASA, said “[the] SATMC’s application for duties is absurd, given that of the almost 3,200 tyre products sold in South Africa, the applicants, according to their own price lists, collectively import 80% of the variety of tyres that they sell.”
He notes that this increase in tyre prices will add a significant burden to already financially-strained consumers, and warns that it may lead motorists to take drastic measures such as trading down to second-hand or illicit tyres, or delaying replacing their tyres, which put their safety on the road at higher risk.
Message to government
A spokesperson for the National Taxi Alliance, Theo Malele, said the government “should be looking at every way possible to arrest the surging cost of transport. ”
“We already estimate that taxi fares need to rise by up to 30% due to rampant petrol price increases. 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.”
According to the June 2022 report from the Pietermaritzburg Economic Justice and Dignity Group, someone working 21 days a month spends 34.5% of total wages on transport, whereas for someone working 15 days a month, transport accounts for 55.25% of their wages.
“Government must intervene as a matter of urgency to reject SATMC’s application for these duties immediately,” said Malele.
Gavin Kelly, CEO of the Road Freight Association (RFA), added that if the SATMC’s application succeeds, it will result in an estimated 6% increase in costs for freight operators.
“Tyres are a huge cost factor for road transporters in South Africa, and any increase in costs upstream, will ultimately filter down to consumers, as most operators will be unable to absorb the full cost of increases,” said TIASA.
“This will have a knock-on effect as over 80% of South Africa’s food, medicines, fuel, and many other goods are transported by road, so rising costs have an impact on every single item transported to, and across South Africa.”
Loading ...