The South African Tyre Manufacturers Conference (SATMC) announced its “application to investigate the unfair trade caused by dumped imports of passenger, truck, and bus tyres imported from China is part of a sustained effort to rescue the local tyre industry.”
This comes after the Tyre Importers Association of South Africa (TIASA) warned that, if successful, this application could cause tyre prices in the country to go up by as much as 41%.
The SATMC represents the four tyre manufacturing companies: Bridgestone, Continental, Goodyear, and Sumitomo Rubber South Africa.
Focus on local industry
“The SATMC is not against healthy trade and competition at fair prices, but rather against tyres designed and manufactured in China that are imported unfairly into South Africa at unsustainable, rock-bottom rates,” said Nduduzo Chala, SATMC managing executive.
The SATMC argues these practices limit the competitiveness of domestic manufacturers, who employ more than 6,000 people directly in South Africa and create indirect employment opportunities for more than 19,000 people.
Chala said that in 2021, imported tyres accounted for over 50% of local circulation and that China holds the “lion’s share of tyre imports”. Of the tyres sold domestically by SATMC members, over 70% were produced in South Africa, he said.
The investigation by International Trade Administration Commission (ITAC) could lead to import duties of between 8-69% being levied on the imported tyres from China, according to TIASA.
However, the SATMC said similar action has been taken in countries such as India, Nigeria, the United States, and the United Kingdom to protect the local industry.
“It is not our intention to increase tyre prices or to hit the wallets of customers,” said Chala.
“SATMC members are concerned about the knock-on effects of these destructive practices for job creation and economic growth within South Africa.”
The ITAC investigation was initiated on 31 January 2022 and is currently in its preliminary phase.
“Responses received are being assessed in line with World Trade Organization and domestic regulatory and legislative criteria,” said the SATMC.
“The next procedural step in the investigation would be a preliminary determination by ITAC which is expected to be issued in August.”
The investigation is required to be finalised within 18 months from the date of initiation, according to the organisation, with a final determination expected to be made in early 2023.