Passenger Car Tires to See Next Round of Price Hike

In the wake of Goodyear’s tire price hike this year, Zhongce Rubber also announced to follow suit and raise tire prices.

Michelin announced on Nov. 22 to lift the prices of some truck and bus tires up by 3%-5%.

A number of tire brands in Shandong have lifted their product prices up by 2% to 5% from Dec.

It means that the Domino of tire price hike has been initiated and price hike has become a key word of the auto tire industry.

This year’s price hike wave started from Apr., when a number of domestic tire producers, including Zhongce Rubber and Doublestar, announced to raise their tire prices.

But the latest wave of price hike not only involves domestic brands, but also international brands, such as Michelin and Goodyear.

In this round of price hike, truck and bus tires as well as engineering tires are the most affected ones.

An industry insider attributed the price hike to two major reasons:

First, raw material price rises. Rubber is the major raw material of truck and bus tire and has greater affect on tire price. Rising prices of carbon black and cord yarn in turn boost the tire price.

Secondly, the government has reinforced the supervision over the overload and overrun phenomenon on the highway, while the logistics industry comes to its peak season, which boosted the sales of trucks and buses and the tire demands.

Comparing with passenger car tire, truck and bus tires are more sensitive to changes of rubber price, so their prices increase immediately. But if the fundamental that props up tire prices hasn’t change, passenger car tire price will hike as well.

Whether the tire price will go all the way up, there is no consensus within the industry.

First, there are numerous factors affecting rubber price and they are uncertain, such as the policy of major producers and the weather.

Secondly, as the coming of winter and New Year, the capacity utilization of tire producers will decrease, but it will be decided by the market demand for truck and bus tires.

Finally, oversupply of low-end products is a reality, fierce competition will not stop in the short term.