Just stay home – Tyre prices set to follow petrol, with massive hike

The Tyre Importers Association of South Africa (TIASA) has warned that the cost of tyres could increase by up to 41% if the four large domestic tyre producers – Continental, Bridgestone, Goodyear, and Sumitomo – are successful in their duty application on vehicle tyres.

The manufacturers are collectively known as the SA Tyre Manufacturers Conference (SATMC).

TIASA was briefing the media on Tuesday on the impact of the transport of goods, taxi fares and other industries if new duties on vehicle tyres are imposed.

ALSO READ: Mineral resources department starts process to deregulate price of 93 octane petrol

It said the cost of transport and goods will surge if new duties on vehicle tyres are imposed.

“The 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 and it will impact cost of transport and road safety significantly.”

TIASA says it will oppose SATMC’s application to the International Trade Administration Commission (ITAC) to impose additional duties of between 8% and 69% on passenger, taxi, bus and truck tyres imported from China.

Charl de Villiers, Chairperson of TIASA believes that SATMC’s application for duties is absurd, given that the applicants, according to their own price lists, collectively import 80% of the variety of tyres that they sell.

“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.

“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 said.

Spokesperson for the National Taxi Alliance, Theo Malele, says its message to government is that they 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% due 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.”

SATMC’s four members were recently investigated for price-fixing by the Competition Commission. The Commission found that the four companies had a collusive relationship from 1999 until at least 2007.

While Bridgestone applied for, and was granted, leniency in 2009, and Dunlop has settled, Goodyear and Continental still face final adjudication of the matter in front of the Competition Tribunal.

According to the June 2022 report from the Pietermaritzburg Economic Justice and Dignity Group (PMBEJD), someone working 21 days a month spends 34.5% of total wages on transport, whereas for someone working 15 days a month, transport accounts for 55.25% of their wages.

Gavin Kelly, CEO of the Road Freight Association (RFA), says based on the projected 17% increase in the landed cost of truck tyres, they estimate that this will translate into an 6% increase to operators.

“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.”

TIASA says the increase in the cost of tyres will not affect the aviation industry or cost of air travel as the increase only affects the road, freight and consumer transport industries.

Tyres are a huge cost factor for road transporters in South Africa, and any increase in costs will have a knock-on effect, as over 80% of SA’s food, medicines, fuel and many other goods are transported by road, so rising costs have an impact on every single item transported to, and across South Africa.

The shift from road to rail has seriously stalled over the past 18 months, as the country’s rail infrastructure has been vandalised, operating ability has deteriorated and the available rail network has shrunk.

ALSO READ: Petrol price expected to drop in August