The Tyre Importers Association of South Africa (TIASA) is opposing the SA Tyre Manufacturers Conference’s (SATMC) International Trade Administration Commission (Itac) application to impose additional duties on tyres imported from China, saying that doing so will increase cost pressures on motorists, commuters and the transport sector.
Tiasa says that should the SATMC’s Itac application be successful, the taxi industry will suffer the most, possibly seeing the industry paying 41% more for tyres.
SATMC is comprised of the country’s four largest tyre producers Continental, Bridgestone, Goodyear and Sumitomo.
Also facing price pressure risks according to the association will be motorists as well as the truck and bus sectors which stand to see price shocks of at least 38% and 17% respectively.
“The sad reality is that while this application makes no sense at all, it will, if successful, add a significant cost burden to motorists, taxi and bus operators and trucking and logistics companies,” Tiasa chairperson Charl de Villiers says.
Impact on Taxi industry
Earlier this month the National Taxi Alliance (NTA) announced national taxi fare increases of up to 30% as a response to rising fuel costs. At the time of implementing the increases the alliance said they were a necessary measure to protect the industry’s bottom line.
However, the industry now warns that the anticipated increase in the cost of tyres could potentially offset the benefits that fare increases were supposed to have in ensuring the industry’s survival.
“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,” NTA spokesperson Theo Malele says.
The alliance has called on government to intervene in the matter and find solutions that will both protect the industry and its customers.
“Government must intervene as a matter of urgency to reject SATMC’s application for these duties immediately,” Malele adds.
Impact on road freight
The CEO of the Road Freight Association (RFA) Gavin Kelly says the success of the application could see truck operators having to stomach a 6% in cost pressures.
A price increase that the sector may be forced to pass on to the consumer which runs the risk of translating into high food, medicine and fuel costs.
Kelly further cautions that increased costs to the industry could see struggling operators squeezed out of the industry.
“Transport companies already cannot afford the ever-rising operating and fuel costs, and so an increase in the cost of tyres could become the final nail in the coffin for many operators, leading to a collapse in the country’s critical road freight logistics sector.”
Road safety risks
Apart from the threat of increased cost pressures on South Africans, Tiasa says the success of the ITAC application could also risk decreasing safety on the country’s roads as motorist may delay replacing their tyres to avoid price increases.
“Even more concerning is that vehicle owners, when faced with such dramatic cost increases, may trade down to second hand or illicit tyres, or simply delay replacing their tyres, which places every road user at greater risk of accidents,” de Villiers says.
Kelly reiterates de Villiers’ concerns adding that operators may decide to trade down and buy tyres of inferior quality as a way to cut costs, placing all road commuters at risk.