ATMC and its members, Bridgestone South Africa, Continental Tyre South Africa, Goodyear South Africa and Sumitomo Rubber South Africa, have played a key role in advocating for the anti-dumping duties and participated in the investigation by ITAC. File
The South African Tyre Manufacturers Conference (SATMC), which represents the four tyre manufacturers with plants in South Africa, yesterday welcomed the continued imposition of anti-dumping duties on passenger, truck and bus tyre imports from China.
“Since the start of the investigation we have seen no less than three price increases from the local manufacturers with a fourth one due to come into effect in the next month or two. The consumer will once again have to bear the brunt of these increases. This is exactly what we predicted will happen if a dumping margin is introduced,” Tyre Importers Association of South Africa chairperson Charl de Villiers said yesterday.
“We expect prices to increase further in coming months as the more expensive stock starts arriving,” he said in response to Business Report questions.
The SATMC applied to the International Trade Administration Commission (ITAC) for relief against “unfairly traded” tyre imports from China in late 2021. ITAC started investigating on January 31, 2022, and despite warnings from tyre importers that local tyres might rise sharply if anti-dumping duties were imposed, a preliminary determination by ITAC saw provisional ad valorem duties of 38.33% imposed in September 2022, until March 8, 2023.
Road Freight Association CEO Gavin Kelly said in response to a question from Business Report, that in fact, the price of the most commonly used tyre in the freight industry has increased by 15.9% from July 2022 to July 2023 (well above inflation).
“In September 2022 alone, there was a 7.6% increase,” he said.
De Villiers said they were very concerned with the decision by Minister of Trade, Industry and Competition Ebrahim Patel to impose additional dumping margins on tyres from China for the next five years; however “we are pleased he did not impose the high percentages initially asked for by SATMC. We have already seen price increase notifications being sent out by SATMC members in anticipation of the dumping margin being imposed.”
SATMC said yesterday that ITAC’s final determination, and a decision by Patel, would mean that the duties on the respective tariff classifications imposed last September remain in place for five years until July 2028. They range from 7.18% to 43.6%.
“Fairly traded imports” from other countries will continue unaffected into the Southern African Customs Union (Sacu), SATMC said.
In 2021, according to SATMC research, imported tyres accounted for more than 50% of local circulation, with China holding the lion’s share of tyre imports into South Africa. The four big tyre manufacturers also import tyres they don’t make locally.
SATMC managing executive Nduduzo Chala said in a statement: “We applaud this decisive measure by ITAC and the minister, which comes as a significant victory for the domestic tyre industry. These final anti-dumping duties will uphold fair trade practices and protect the economy against opportunistic pricing in the tyre sector, which has posed a threat to the future of the South African tyre industry.”
He said the SATMC and its members, Bridgestone South Africa, Continental Tyre South Africa, Goodyear South Africa and Sumitomo Rubber South Africa, played a key role in advocating for the anti-dumping duties and participated in the investigation by ITAC.
The tyre-manufacturing body provided data, analysis, and expertise to demonstrate the adverse effects of the dumped tyres from China on the domestic industry.
He said the SATMC and its members were committed to driving growth, promoting innovation, ensuring the sustainability of the domestic tyre industry and the continued supply of the wide Sacu customer base.
“These duties will be essential in establishing a fair competitive landscape for our industry, ensuring a level playing field for domestic manufacturers, and preserving local employment opportunities,” he said.
In 2022, the four South African tyre manufacturers’ production capacity utilisation stood at 80.7%. The four manufacturers also spend some R534.9 million in capital expenditure during the year, and employed some 6 000 people directly.
BUSINESS REPORT