Fo c u s o n Tyre IM PorTs - SA TREADS

Focus on Tyre Imports • 9
IMPORTS
– HAVE THE TABLES TURNED?
Close on 50% of the current tyre consumption
in South Africa is made up of imported makes,
a staggering statistic that is deeply indicative
of the rising popularity of foreign made tyres
over the last few years. Price is the primary
reason for the rise in import figures, with
low cost producers from emerging countries
continuing to target our market with products
that are often of questionable quality;
availability is another, especially as it is not
economically viable for local tyre plants to
comprehensively cater to the diverse needs of
the market by way of application and tyre size.
So, not all imports entering our market potentially pose a risk to the
consumer. The local four manufacturers – Bridgestone, Goodyear, Apollo
and Continental – are all compelled to import tyres on a frequent basis
to supplement their product range. Plus, SA’s status as a global player
demands that the SA consumer has access to the world’s leading tyre
brands from Europe, USA, and the Far East.
With that said, the rise of ‘dubious’ operators who are dumping low cost
tyres in the market, whilst also attempting to evade paying the required
import duties, is posing a significant threat to the local manufacturing
industry as well as to the reputable importers, not to mention the end user.
For over a decade, local tyre companies have been campaigning for playing
fields to be levelled, something which they claim can only be achieved by
clamping down on questionable low cost products and the illicit practices
that accompany them. This they have done by eliciting assistance from
relevant government bodies such as the DTI (Department of Trade and
Industry), the NRCS (National Regulator for Compulsory Specifications)
and ITAC (International Trade Administration Commission for South Africa).
And according to the import segment of the market, their efforts have not
been in vain. Local representatives of some of the world’s leading tyre
makers are alleging that although price may have once played a significant
role in securing a presence for foreign tyres in this market, this is no longer
case. They further suggest that the tables have turned with respect to the
market dynamic, so much so, that imported tyres are now receiving the
‘short end of the stick’, so to speak.
“I never thought I’d see the day when imported passenger tyres would sell
for more than some locally produced makes, but this is precisely what is
taking place,” said Charl de Villiers, MD of Tyrecor. I continuously circulate
amongst dealers comparing pricing from local and imported brands for the
various segments, and this new development is alarming.” His concerns are
being echoed by opposition companies such as Tubestone and CFP Tyres.
“It is becoming increasingly more difficult for us to compete against the
local makes,” they confirmed.
But Julio Fava, Executive Manager Export, OE and Agri for Bridgestone SA
disagreed: “Local products remain more expensive than imports, it’s only
the differential that has reduced.”
“We are extremely surprised to hear of these rumours,” echoed Riaz
Haffejee, CEO, Apollo Tyres SA, “since this is contrary to our experience.”
The price issue aside, importers are faced with their own unique set of
trading challenges. Currently in the spotlight is the sudden withdrawal of
the agricultural rebate applicable to tyres entering the country under the
Tariff Heading 4011.61 This rebate was apparently set in place some years
ago to assist the agricultural sector that is compelled to import herringbone