RFA slams Dept of Trade and Industry over whopping tyre levy hike

The Road Freight Association (RFA) has slammed the Department of Trade, Industry and Competition over new tyre importation levies published in the government gazette on Friday.

The DTiC’s 38,8% anti-dumping protection levies on the importation of tyres into South Africa will severely impact import prices.

SA local industry cannot meet demands

The RFA and other transport-related organisations and associations had engaged with the department to gain clarity on why these anti-dumping duties would be implemented.

RFA’s Chief Executive Officer Gavin Kelly said that South Africa was dependent on tyre imports because the local manufacturing industry was unable to meet local consumption demands.

Kelly said the new anti-dumping duties would adversely affect the local manufacturing industry.

“Tyres are imported from various markets – precisely because South Africa does not have the capacity to meet local consumption,” said Kelly.

He said the reasoning behind the anti-dumping duties were not clear.

“Will the DTiC be using these levies collected on imported tyres to fund the development of the local tyre industry, specifically for local manufacturers?

“Will tyres that are locally manufactured also include the price hike?

“What is the plan by the DTiC to ringfence such levies collected, to ensure that the local industry is developed and grown?”

ALSO READ: SATMC calls for tariffs on imported tyres from China to protect local industry

Increased tyre prices knock-on effect

A 38,8% increase in the price of tyres will impact the operational costs of transport, driving the price of the transportation of goods up by at least 8%, depending on the transport leg variables, this could be more.

“This means that, despite the dire economic situation in the country, consumers will pay more for goods, (including the basic basket of everyday food, transport and medicines,” said Kelly

“This will drive inflation – if not higher, it will definitely hold off any decreases from occurring a lot sooner than we had hoped.”

Tyre prices were subject to normal 5.9% annual increases in July 2022.

“By adding the anti-dumping levy, tyre prices will now increase by a whopping 44,7% in a single year.”

Kelly warned the hike was ‘untenable for any transport operation’ – whether moving freight or passengers – and will see increases inevitably being passed on to consumers.

Tyres are a crucial link in the safe and efficient operation of a vehicle – affecting road safety through road holding ability, carrying weights, navigating through bad roads and ensuring the driver has control in unexpected weather or traffic situations.

They also affect the fuel consumption of a vehicle and the type of wear and tear that is experienced by the road surface.

“The country cannot have a situation where tyres become so expensive that fleet owners and private individuals begin to push tyres to the extreme limits of wear and endurance.”

The Association is now appealing to the department to reconsider this decision saying it should only consider the possible introduction of an anti-dumping levy, once there is sufficient sustainable capacity in the country.

*Compiled by Narissa Subramoney

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