Industry association the South African Tyre Manufacturers Conference (SATMC) says more than 70% of tyres sold by its members are produced in South Africa.

It further notes that its application to the International Trade Administration Commission of South Africa (Itac) is part of efforts to rescue the local tyre industry.

The SATMC’s comments follow a briefing earlier this week by the road transport and freight industries, as well as the Tyre Importers Association of South Africa (Tiasa), in which they said they would be opposing the application to Itac by domestic tyre manufacturers seeking increases in respect of import tariffs for tyres originating from China.

Tiasa said it was worried that the proposed tariff increases would raise the prices of tyres in South Africa.

“The SATMC supports healthy trade and competition at fair prices. However, tyres designed and manufactured in China are imported unfairly into South Africa at unsustainable, rock-bottom rates, which limits the competitiveness of domestic manufacturers.

“SATMC members employ more than 6 000 people directly in South Africa and create indirect employment opportunities for more than 19 000 people,” says SATMC managing executive Nduduzo Chala.

The SATMC’s application to Itac asserted that tyres from China were being imported at predatory prices and causing material injury to the domestic manufacturing industry. The South African Revenue Service was dealing with 64 cases of illicit trade into the country related to the tyre industry.

“This has been occurring over a number of years and the continued proliferation of large consignments of cheap imported tyres from China is something we are strongly opposed to.

“It is not our intention to increase tyre prices or to hit the wallets of customers. This is about fighting unfair trade. SATMC members are concerned about the knock-on effects of these destructive practices for job creation and economic growth within South Africa. We want to keep the South African manufacturing sector alive,” says Chala.

The four manufacturers, Bridgestone, Continental, Goodyear and Sumitomo Rubber South Africa, have made sizeable investments into increasing their domestic capacity, but this continues to be eroded as rising cheap imports adversely impact industry capacity utilisation, the SATMC points out.

“We hope that our anti-dumping application to Itac, if successful, will help to provide a more level playing field for the South African tyre manufacturers to sustain the significant role of this industry within the economy,” says Chala.

The four manufacturers are committed to local production and ensuring its growth in the future. SATMC data compiled independently by Lightstone Auto shows that over 70% of tyres sold by SATMC members in 2021 were tyres produced in South Africa, he adds.

The investigation by Itac could lead to import duties being levied on the imported tyres from China. Similar action has been taken in countries such as India, Nigeria, the US and the UK, in order to protect local industry and save jobs.

“Domestic tyre manufacturers are a significant part of the South African automotive manufacturing value chain and any production losses they face as a result of products being dumped into the country have the potential to negatively impact localisation and job levels, which is contrary to the objectives of the South African Automotive Masterplan 2035,” says industry body the National Association of Automotive and Allied Manufacturers executive director Renai Moothilal.

“SATMC companies work with tyre importers that demonstrate fair pricing, prioritise quality and safety, and are able to offer excellent after-sales service, guarantees and insurance, uplifting the domestic tyre sector and road safety industry as a whole,” notes Chala.

Between 2019 and 2021, local tyre manufacturers contributed more than R15.9-billion to the South African economy.

“Thousands of employment opportunities have been created over the years, and the SATMC is committed to maintaining these positions, and in future, to increase this skills pool. We have also developed the industry via supplier development, employee contributions, skills development, corporate social investment and enterprise development, in addition to investments into their local manufacturing plants.

“Local manufacturers have worked hard to withstand substantial challenges to their operations and protect the entire value chain, particularly in the aftermath of the pandemic, looting, theft and destruction of property, coupled with ongoing challenges related to electricity supply and labour,” says Chala.

The SATMC is committed to excellence in the tyre industry, with a focus on developing products in line with international standards and customer needs, he adds.

In 2021, imported tyres accounted for more than 50% of local circulation, according to SATMC research, and China holds the lion’s share of tyre imports into South Africa.

The Itac investigation, which started in January, is currently in its preliminary phase.

Responses received are being assessed in line with World Trade Organisation and domestic regulatory and legislative criteria. The next procedural step in the investigation would be a preliminary determination by Itac, which is expected to be issued in August.

A final determination is expected to be made in early 2023.