THE South African Revenue Service (SARS) has published an increase in the rate of customs duty on vehicle windscreens, following an application by South African manufacturers who claimed they were at a price disadvantage, especially against East Asian manufacturers.
The International Trade Administration Commission increased the import duty from 15% to 30%, despite objections from local importers and original equipment manufacturers.
The commission said in a statement that it believed the additional tariff support would "significantly improve" the competitive position of the domestic windscreen industry.
The application was brought by National Auto Glass, FGW Safety Glass, Shatterprufe (a division of the PG Group) and USG Autoglass.
Major importers of automotive safety glass include Grandmark International, Wholesale Motor Glass, Windscreen Distributors and Yi Fa Auto Glass (trading as Best Safety Glass).
The commission said it took into account the fact that the South African Customs Union automotive glass industry had invested a considerable amount of capital to establish world-class production facilities.
It also considered the fact that consistently high production volumes were required to achieve cost-competitiveness.
The commission found in its investigation that the domestic industry was at a price disadvantage — especially to low-priced imports from East Asia.
"The support should enable the industry to fully utilise its existing production capacity, achieving economies of scale through longer production runs, with a reduction in the marginal cost of production," the commission said on Friday.
Grandmark International, which had been at loggerheads with the PG Group, said on Monday that the increased duty would affect the company’s cost structure.
"Over the last year, we have managed to penetrate the market by offering a high-quality and cost-efficient alternative, yielding an average saving of over 45% to the insurance industry," Grandmark International sales director Filum Ho said. "Clearly the increase in duty would have a direct impact on our costs.
"However, we remain committed to providing a viable alternative for the benefit of both the industry and the consumer," he said.
He added that the insurance market received about 500,000 claims for windscreens every year. The cash market — or uninsured vehicles — purchased another 500,000 units.
Grandmark last year successfully applied to the South Gauteng High Court for an interim order preventing PG Group from "disparaging a competitor". The PG Group had embarked on a campaign describing in letters to the insurance company that its rival was selling "Chinese imported glass", creating an impression that the windscreens were of inferior quality.
The PG Group also imports, distributes and sells windscreens under the trade name Shatterprufe. Grandmark imports, distributes and sells vehicle parts — including windscreens — under the name Grandmark Glass.