• Market Watch

Tyre prices could balloon in SA

- 2022-07-29 00:00:00

Penelope Mashego - Importers have warned of much pricier tyres in South Africa if an application to impose anti-dumping tariffs on Chinese imports succeed.
The SA Tyre Manufacturers Conference (SATMC) – which represents Continental, Bridgestone, Goodyear and Sumitomo – has applied to the International Trade Administration Commission of South Africa (ITAC) for anti-dumping duties on Chinese imports.
ITAC spokesperson Thalukanyo Nangammbi says that SATMC had applied for anti-dumping duties on new pneumatic tyres (rubber tires that are filled with air and mounted around wheels) for cars, as well as for tyres used on buses or lorries imported or originating from China.
Nangambi said the investigation into the application is under way and is almost at preliminary determination stage.
TAXIS
In a briefing on Tuesday, the Tyre Importers' Association of South Africa (Tiasa) said it would oppose the application.
Tiasa's chairperson Charl de Villiers said that the taxi industry would be the hardest hit by the planned tariffs. According to Tiasa’s calculations, the price of 13-inch passenger vehicle tyres could increase by between 38% and 41%, while truck and bus tyres could see a 17% to 18% hike and SUV tyres could go up by 30%.
"These increases will have a monumental impact across the transport of goods and public transport ... and drive up inflation, which is already at 7.4%," De Villiers said.
Spokesperson for the National Taxi Alliance, Theo Malele, said that the price increase could mean a 30% increase in passenger tickets, while the industry's profit margins would be squeezed and livelihoods threatened.
"Taxi operators, with the fuel increases, are unable to meet their monthly financial obligations; this will further exacerbate the situation with the additional 41% tyre [price] increase," Malele explained.
He added that driver and passenger safety will be at risk as taxi owners prolong tyre replacements due to the high price.
FREIGHT
Gavin Kelly, CEO of the Road Freight Association, also warned about the impact on transporters of goods on South Africa's roads.
About 80% of the goods moved in South Africa are transported on the road and alternatives like rail are not an option. The country's rail system has been hit by locomotive shortages, vandalism and theft, putting more pressure on road transport.
Kelly said some road freight vehicles use up to 30 tyres.
Drivers must ensure that their tyres meet strict safety requirements, and they also find themselves having to replace tyres after driving on roads that are in poor condition, which means changing tyres more often. In addition, they have to contend with spare tyres being stolen off their trucks.
INFLATION
All the costs, including the price increase, will filter into the cost of moving products in South Africa and trickle down to consumers.
"Transporters cannot absorb that cost, just like a taxi operator cannot absorb that cost. So, you and I will start to pay more for whatever is moved by road," Kelly said.
Kelly added that, if approved, the tariff increase will add to the normal annual increases that come in August. On average, tyre increases are between about 6% and 8% depending on currency fluctuations, market availability and demand. – Fin24