Tyre prices set for inflation

Tread warily, say opponents of imported tyre duties increase

WARNINGS are being given that the price of tyres could increase drastically, causing major threats of adversarial consumer reaction.

The Tyre Importers Association of South Africa (Tiasa) says the cost of tyres could increase by as much as up to 41%.

This if the four large domestic tyre producers, collectively known as the SA Tyre Manufacturers Conference (SATMC), are successful in their application to the International Trade Administration Commission to impose additional duties of between 8 and 69% on passenger, taxi, bus and truck vehicle tyres imported from China.

SATMC comprises Continental, Bridgestone, Goodyear and Sumitomo.

“The imposition of duties is expected to have a material impact on the price of tyres, not only for passenger vehicles, but also for trucks, and for the vast network of taxis and buses that transport citizens across the length and breadth of the country daily,” Tiasa said in a media release.

“Tyres are the third biggest cost driver in transport, after wages and fuel.”

They are also concerned that the price hikes might lead to trade in second-hand or illicit tyres, or delay replacing worn tyres at the risk of accidents.

Added to the recent petrol price increases, the tyre rise will be passed on to taxi commuters, among others.

Donald MacKay, founder and CEO of XA International Trade Advisors said, “If new duties are imposed against Chinese imports, two things will happen: the first is that those importing tyres will shift imports to other, possibly more expensive markets, increasing the price of tyres.

"Secondly, what naturally follows the imposition of additional duties is that domestic producers and retailers will raise the local prices to meet the imported cost.”

Spokesperson for the National Taxi Alliance, Theo Malele says 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% owing 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.

“Government must intervene as a matter of urgency to reject SATMC’s application for these duties immediately,” says Malele.

The date for the decision on SATMC’s application is not known at this stage.

• Taxi industry will be hit hardest, with taxi tyres increasing by 41%, small passenger vehicle tyres by 38-40%, and truck and bus tyres by 17%

• Tyres are the third biggest cost driver in transport, after wages and fuel

• Will impact cost of transport and road safety significantly