Tyre import restrictions set to constrict economic activity

The Asia Tyre Importers Association has extended a plea to the Government to safeguard this industry that powers economic activity across sectors and help avoid an impending calamity.

It said Sri Lankan tyre dealers, traders and buyers were faced with a looming tyre scarcity in the country owing to the prevailing restrictions on importation. 

The Government had classified 156 groups of products, including tyres, as non-essential imports and imposed restrictions on their importation in April 2020 with the aim of controlling foreign exchange outflows. The Government further relaxed imports for a few tyre sizes in July 2020. However, several sizes of tyres are still classified as restricted items.

Going beyond safeguarding the interests of tyre importers and the innumerable other stakeholders who are part of this indispensable industry, the association seeks to raise awareness around the possible issues resulting from this crisis and protect all Sri Lankans.

This includes a string of complications that could result caused by old, second-hand, or substandard tyres such as poor road grip, loss of control, sub-optimal air pressure levels, extended braking distances, etc. This in turn could lead to greater risk of accidents that would put passengers, road users and other bystanders in harm’s way.

Fleet-owners would be particularly affected as their vehicles need tyre changes every few months to ensure safe, uninterrupted operations. These fleets manage the distribution of highly essential goods around the island and any disruptions they face would affect consumers as well as traders and manufacturers across several industries. It would also cause loss of employment both within the sector and across all connected industries, putting further pressure on the economy.

There is also an increased dependence on limited public transport infrastructure and issues faced by vehicle owners due to the non-availability of tyres recommended by vehicle manufacturers.

Asia Tyre Importers Association Vice Chairman Sunil Fonseka noted that locally-manufactured tyres accounted for roughly 50% of the country’s annual demand of 3.1 million tyres in 2019. 

“Up to 40% of the 1.2 million passenger cars, light trucks, trucks and buses on our roads needed imported tyres. With approximately 150,000 imported tyres being sold per month in Sri Lanka, existing stock levels are draining quickly with the current import restrictions; we foresee the country experiencing a shortage of tyres within the next 30 days.” 

“Locally, tyres are not manufactured for European and Japanese premium vehicles such as Mercedes Benz, BMW, Volvo, Audi and Toyota Land Cruiser and do not meet the specifications and standards of Japanese vehicle manufacturers such as Toyota and Nissan for several of their vehicles. Also, tyres for large vehicles which are used to carry containers, petroleum products and gas are not manufactured. Truck fleets of Government and private sector organisations including the Ports Authority, Tri Forces and Ceylon Petroleum Corporation are already affected. 900R20, 10.00R20, 11.00R20 and 1200R20 steel belted radial tyres are critical for the public-sector transport, Government sector departments and all security forces. We believe that there will be a severe shortage for prime mover machines OE tyres and truck and bus radials in the coming weeks. Several sizes of motorcycle tyres for Yamaha (including the police bikes), Honda, Suzuki, TVS, Bajaj and other branded bikes too are not manufactured in Sri Lanka. Furthermore, the local manufacturer who already enjoys a monopoly also remits a portion of its earnings to its Indian partners,” he added.

The Asia Tyre Importers Association comprises around 50 tyre importers who together bring down over 900,000 tyres per year. The association, through its membership, provides direct and indirect employment to about 2,500 and 10,000 Sri Lankans, respectively. Imported tyres generate 67% customs duty and other tax amounting to Rs. 4.5 billion per annum. Priced competitively, they offer an affordable option to motorists.