New tariff could see tyre prices in South Africa increase by as much as 45%

The Department of Trade, Industry and Competition (DTIC) has published anti-dumping protection levies on the importation of tyres into South Africa in terms of section 57A of the Customs and Excise Act, 1964.

This provisional payment in relation to anti-dumping duty is imposed up to and including 8 March 2023, said the Road Freight Association (RFA), noting that the anti-dumping duty is levied at 38.8% on the imported price of the tyres.

Together with other transport-related organisations and associations, the RFA said it had earlier engaged with the DTIC – and bodies involved in the retail and wholesale tyre sectors – to gain further clarity.

They question why these anti-dumping duties would be implemented, given the inability of the local manufacturing industry to meet local consumption demands, as well as to ascertain how the local manufacturing industry would be adversely affected.

“Tyres are imported from various markets – precisely because South Africa does not have the capacity to meet local consumption,” said Gavin Kelly, RFA chief executive officer.

He questioned whether the DTIC would use these levies collected on imported tyres to fund the development of a local tyre industry, specifically for local manufacturers, and whether tyres that are locally manufactured are also included in the price hike.

“What is the plan by the DTIC to ringfence such levies collected to ensure that the local industry is developed and grown?” asked Kelly.

A 38.8% increase in the price of tyres will impact the operational costs of transport, driving the price of the transportation of goods up by at least 8%. Depending on the transport leg variables, this could be more, Kelly stressed.

“This means that, despite the dire economic situation in the country, consumers will pay more for goods, including the basic basket of everyday food, transport and medicines. This will drive inflation – if not higher, it will definitely hold off any decreases from occurring a lot sooner than we had hoped.”

According to the RFA, tyre prices incurred the normal annual increase in July 2022 – which was 5.9%.” By adding the anti-dumping levy, tyre prices will now increase by a whopping 44.7% in a single year. This is untenable for any transport operation – whether moving freight or passengers – and will see increases inevitably being passed on to consumers.”

Tyres are a crucial link in the safe and efficient operation of a vehicle, said the association. They also affect the fuel consumption of a vehicle and the type of wear and tear that is experienced by the road surface.

“The country cannot have a situation where tyres become so expensive that fleet owners and private individuals begin to push tyres to the extreme limits of wear and endurance,” said Kelly.

The association appealed to the DTIC to reconsider its decision and proposed that once there is sufficient, sustainable capacity in the country, the possible introduction of an anti-dumping levy is then considered to protect a local tyre manufacturing industry that actually produces enough tyres to meet local demands.

Read: Warning over higher costs for motorists in South Africa