Tyre manufacturers devise new plan to curb import misdeclaration

Tyre manufacturers have
come up with a new tariff
formula to curb the f lood
of illegal tyre imports into
South Africa.
SA Tyre Manufacturers’
Conference (SATMC)
managing executive
Nobuzwe Mangcu said last
week that the organisation
had approached the
International Trade
Administration
Commission, together
with the Tyre Importers’
Association of SA (Tiasa),
with the potential solution
of a tariff formula.
Mangcu said the
problem of undeclared
and under-declared
imported tyres entering
the local market and sold
illegally as second-hand
tyres was “significant”
and posed a risk to
local manufacturers,
threatening the viability of
local mass production.
“Our estimate is that
there are approximately
4.3 million tyres coming
in on an annual basis;
these are declared tyres
being imported, but over
and above that there are
tyres coming into the
SA market that are not
declared and are sold in
the market,” she said.
“We are working closely
with SA Revenue Service
(Sars) to close as many
loopholes as possible to
prevent tyres coming in as
other commodities.”
Mangcu said the SATMC
had applied to Sars for
trailer tyres and aftermarket
tyres imported
on rims for retreading,
and which attracted a
lower import duty, to
be separated on tariff
schedules to indicate the
overall value. It is illegal to
import second-hand tyres
for resale and these may
only be used for retreading
purposes.
“The primary concern
is safety, especially on
large commercial vehicles
carrying cargo; if the
tyre doesn’t perform as it
should there is a massive
safety risk and the cost for
the f leet owner is going to
be higher,” she said.
However, Mangcu
said in tough economic
times owners opted for
short-term savings while
knowing that within
20 000km they might
need to replace the tyres.
“In addition to the safety
concern
there is
a direct
impact on
trade –
and in the
medium
term the
risk is that
it may
become
more
and more
difficult
to produce
tyres in SA
in large
volumes,” she said. This
could potentially impact
local jobs in the sector, she
added.
SATMC applied for
formula duties to be
implemented for
tyres in 2013 that
would allow
imports by mass
to determine
value but Itac
rejected the
application.
Mangcu
said together
with the
Tiasa the
industry
had last year
approached
Itac with
a proposal
for formula
tariffs to be
implemented
that could see
more under-declared
consignments discovered
and importers penalised.
“We are still in
negotiations and
believe we will be more
successful because we
are approaching them as
the industry and not just
manufacturers,” she said.
Tiasa CEO Pieter Kruger
said manufacturers unable
to produce all sizes locally
were among the country’s
449 importers. He said
8307 tonnes of tyres had
been
imported
for
retreading
between
February
2014 and
January
2016.
“This
is a huge
market –
especially
in the
trucking
industry –
as virgin
casings can be re-treaded
up to four times. This is
still cheaper than new
well-known branded
tyres,” Kruger said.
“If we look at these
casings a lot of them still
have five or six or even
more mm tread. The
problem is these tyres are
sold as second hand as they
are sought after by local
truckers,” he said.
“The importer of these
tyres also makes more
money by selling these
so-called casings as
second-hand tyres. It is
legal to sell the tyres as
re-treads if they were
re-treaded in South
Africa,” he added.
Kruger warned that
truckers could end up with
dangerously poor quality
tyres with carcasses eight
years or older which had
not complied with the SABS
homologation process.
INSERT
We are working
closely with Sars
to prevent tyres
coming in as other
commodities.
– Nobuzwe Mangcu