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- Bridgestone is considering closing 14 of its 27 commercial equity retail stores.
- The Japanese multinational says demand for truck and bus tyres has declined by 10% so far this year.
- A "trade infringement" with Supa Quick has also been blamed.
- For more financial news, go to the News24 Business front page.
The world's largest tyre maker Bridgestone is considering closing a large number of its retail outlets in South Africa.
The Japanese multinational's southern African business has 27 retail branches. It may close 14 of these stores in South Africa, eSwatini and Zambia. Eleven closures would be in South Africa and 290 employees could be retrenched.
Bridgestone said a challenging business environment, including decreasing tyre demand, cheaper imports and load shedding, has made business "unsustainable" in certain locations.
A spokesperson said that the local demand for truck and bus tyres has fallen by 10% so far this year compared to last year.
"Our Bridgestone Equity stores have struggled in the face of a shrinking economy; an influx of imported budget product; and significant challenges to our operating expenditure such as increases in fuel prices, erratic power supply and the rising cost of rubber."
The company also blamed a "trade infringement" in its franchise agreement with Supa Quick for the possible closures.
According to a spokesperson, the company is seeking to incorporate its commercial retail business with the Supa Quick franchise, the largest tyre retail franchise in southern Africa.
Supa Quick stores are owned by individual franchisees, but Bridgestone has a close commercial relationship with the group.
"In 2022 the Bridgestone Southern Africa Holdings Group announced that it would consolidate its extensive retail operations under one Supa Quick network in order to maximise its competitive advantage and leading edge," a spokesperson said.
However, 11 Bridgestone retail outlets operate within a 3km radius of an existing Supa Quick franchise, which is a trade infringement in terms of its agreement, the spokesperson said.
"Consequently, after lengthy deliberations that have not returned a viable solution to either challenge, the Bridgestone Retail business – which includes Supa Quick franchises - is considering the closure of 11 stores in South Africa."
While Bridgestone also cited cheap tyre imports for its move to close outlets, South Africa imposed anti-dumping duties ranging from 7.18% to 43.6% on passenger, truck and bus tyres from China this year. The duty will be in place until July 2028.
This came after the South African Tyre Manufacturers Conference - which represents Bridgestone Southern Africa and others - lodged an urgent application to the International Trade Administration Commission in 2021 to combat an increase of dumped imports from China, claiming that the industry had suffered a material injury as a result.
However, despite its closures, Bridgestone dismissed suggestions that manufacturing and selling tyres had become unsustainable, saying there are no plans to shut down any local manufacturing facilities in the country that currently supplies 70% of its wholesale volume.
"Bridgestone has been a local manufacturer in South Africa for over 80 years. Our Brits plant, which celebrated its 50th year in operation last year, will receive additional investment over the next three years focusing on energy security and decarbonisation."
Its wholesale business will also continue to manufacture and sell tyres within the country, and supply BMW, Mercedes-Benz and Toyota.
* This article has been edited to correct the number of Bridgestone retail stores in southern Africa, from 22 to 27. This means the company will not be closing two-thirds of its stores as initially reported. News24 regrets the error.
