In 2021 imported tyres accounted for more than 50 percent of local circulation, according to Satmc research. China holds the lion’s share of tyre imports into South Africa. File photo
Tiasa said it had applied to court to compel the International Trade Administration Commission (Itac) and the SA Tyre Manufacturers Conference (Satmc) to disclose critical information being withheld with respect to Satmc’s application for the imposition of anti-dumping duties on imported tyres, and to challenge the manner in which the Itac is conducting the investigation.
Satmc – made up of Continental, Bridgestone, Goodyear and Sumitomo – recently applied to Itac for the imposition of substantial additional duties of between 8 percent and 69 percent on passenger, taxi, bus and truck vehicle tyres imported from China. There are already import duties levied on tyres of between 25 percent and 30 percent.
In 2021 imported tyres accounted for more than 50 percent of local circulation, according to Satmc research. China holds the lion’s share of tyre imports into South Africa.
Satmc argues that the four manufacturers have made sizeable investments into upping their domestic capacity, but this continues to be eroded as rising imports adversely impact industry capacity utilisation.
Business Report has requested comment from Satmc and Itac, but by the time of going online had not received responses.
In July Tiasa, the National Taxi Alliance and the Road Freight Association held a joint media briefing to oppose the move, saying at the time that the taxi industry would be hit hardest, with mini-bus tyre prices increasing by 41 percent, while truck and bus tyres would go up by 17 percent.
According to customs data, tyres worth R5.7 billion were imported into South Africa in the investigation period under review (August 2020 to July 2021).
Charl de Villiers, the chairperson of Tiasa, said: “We are operating in the dark when it comes to this application for additional duties, and the stakes are high for South Africa. If Itac decides to impose the maximum duty percentage requested by Satmc, we could see price increases range from 41 percent for taxi tyres, 38 to 40 percent for passenger tyres and an average of 17 percent for truck and bus tyres.
“These increases will have dire consequences for commuters, the transport sector, and consumers, who are struggling with climbing inflation. Last week, Stats SA announced that consumer inflation had accelerated to a new 13-year high of 7.8 percent, saying that the usual suspects of food, fuel and transport costs were the main drivers,” he said.
Tiasa said Satmc was refusing to disclose own import information.
Domestic manufacturers are unable to produce the full range of tyres, and so they themselves import 80 percent of the variety that they sell to meet local demand.
Satmc had conceded that in addition to manufacturing tyres locally, it also imports tyres, but refused to disclose what it imports, from where, and for what reason, Tiasa said.
Donald MacKay, the CEO of XA Global Trade Advisors, said: “This information is critical, as causality is a foundational principle of an anti-dumping case. In other words, it’s necessary to prove that any injury to the local industry must have been caused by the dumping, and not by something else.
“If Satmc members are importing a significant volume of tyres themselves, they would be inflicting their own injury, which would need to be offset for any injury they claim. They would, therefore, need to demonstrate a compelling reason for the imports.
“This is not confidential information, and it is material to their import duty application and their rationale. For example, we know Continental and Goodyear import 100 percent of truck and bus tyres, yet these domestic producers are importing these tyres instead of purchasing them from the other domestic producers who do manufacture them locally. Why?
“Satmc has refused to share any of this information with Tiasa, and Itac has accepted this. We have, therefore, been forced to apply to court to compel them to do so.”
Tiasa also said Itac product sampling was flawed.
“Itac received an enormous response to the investigation, from over 60 companies, and so instead decided to only review a small sample of submissions as the basis for its final decision. Furthermore, there was no consultation in respect of the sampling, with Itac refusing to allow Tiasa to make any comment or input on the sampling methodology,” Tiasa said.
MacKay said: “With a complex product like tyres, where the local market sells over 3 000 different models, it is almost impossible to select a truly representative sample. To base a duty decision on such a flawed process is deeply concerning.”
Tiasa said it was asking the court to direct Itac to remedy its sampling, provide Tiasa with Satmc’s import data, and the reasons for their imports, and to allow Tiasa sufficient time to make a submission to Itac before it took any decision on the imposition of duties.
De Villiers said: “If the current process is not corrected, it’s likely that Itac will impose provisional duties without Satmc’s import information, or indeed Tiasa’s submissions which have – to date – been excluded from consideration by Itac. This will be a clear impingement on the rights of affected parties to meaningfully participate in this process.
“But most concerningly, Itac’s decision will add a significant cost burden to motorists, taxi and bus operators and trucking and logistics companies. This means that it is South Africa’s cash-strapped consumers who will bear the brunt of increased protection for the four tyre manufacturers.
“But it’s a safety issue too. Vehicle owners, when faced with such dramatic cost increases, may trade down to second-hand, illegally regrooved or illicit tyres, or simply delay replacing their tyres, placing every road user at greater risk of accidents.”
Itac said it could confirm that a court application had been received and the organisation was in the process of obtaining advice from its legal representatives regarding a position.
"The matter is sub-judice and therefore it would be inappropriate for Itac to comment any further at this stage," it said.
Satmc said it had received Tiasa’s Notice of Motion, which was currently being addressed.
"As the Satmc, we believe that we should respect this process," it said.
BUSINESS REPORT