The tire industry is ushering in another round of price increases.
Recently, Bridgestone, one of the world’s largest tire companies, officially announced that it will increase the supply price of passenger car tires by 3%-5% starting from May 1st. At almost the same time, another tire giant Michelin also issued a price adjustment notice, announcing that starting from May 1st, it will increase the price of its passenger car tires and light truck tires, with the increase ranging from 15 yuan to 30 yuan.
In addition, leading domestic companies such as Zhongce Rubber, Sailun Tire, and Wanli Tire have also collectively followed up.
Zhongce Rubber has raised the price of some all-steel tires by 1%-3% and inner tube pads by 2%-5% since April 16; Sailun Tire will increase the price of TBR (truck and bus radial tires) products by 3%-5% from May 1st; Wanli Tire is scheduled to increase the price of TBR products by 3%-4% on May 10, and reminded that it does not rule out further price adjustments in the future.
According to statistics from the tire industry website, more than 70 domestic and foreign tire companies have issued price increase notices this round, covering all categories including passenger tires, truck and bus tires.
Will this round of price increases affect the wallets of end consumers?
On April 21, the person in charge of the tire business of Tuhu Car Maintenance, a leading car maintenance platform, responded, “We will continue to pay attention to cost trends, but there are currently no plans to adjust terminal prices.” The person in charge said that the company has timely stocked up in the first half of this year. Based on the current stocking situation and the cooperation framework with tire manufacturers, it can withstand part of the rising cost pressure in the short term and maintain stable online and offline consumer prices.
In addition, we learned from many other car maintenance platforms and after-sales service stores that this price increase in the tire industry has not yet been transmitted to consumer terminals, but many sales channels have begun to adjust prices.
Some stores said that the planned increase may be similar to the price adjustment range of tire companies.
Take A-class compact family cars with a large market share as an example. The current terminal selling price of supporting tires is about 300 to 500 yuan each. If calculated based on a 3%-5% increase, the price of a single tire will increase by 9 yuan to 25 yuan, and the replacement cost of four tires will increase by 36 yuan to 100 yuan.
For ordinary car owners, the cost of tire replacement for daily commuting vehicles has increased slightly. However, since the tire replacement cycle generally takes several years, the impact is actually relatively limited.
The impact on commercial vehicles will be more obvious: domestic economical TBR truck tires sell for about 1,500 yuan to 2,500 yuan each. After the price increase, a single tire will cost 45 yuan to 125 yuan more. Calculated based on 10 driving wheels, the tire replacement cost will increase by 450 yuan to 1,250 yuan, which will have a direct impact on the operating costs of logistics and transportation companies.
It is also worth noting that there is a significant lag in terminal price adjustments.
According to a dealer of a well-known tire brand, there is a certain transmission cycle from the adjustment of the tire company’s supply price to the implementation of the terminal retail price. At present, “the wholesale end clearly increases the price, and the retail end begins to follow up cautiously.”
He pointed out that because channel inventory is still high and market competition is fierce, terminal retail prices will not jump significantly in the short term. Cost pressure will be absorbed through reducing discounts and gradually adjusting prices.
If raw material prices continue to rise, the possibility of further price adjustments cannot be ruled out.
Industry insiders believe that the sharp rise in raw material prices is the core driver of this round of industry price increases.
“Mainly due to the surge in upstream raw materials such as natural rubber, synthetic rubber, and carbon black, coupled with the increase in energy and logistics costs, the cost has increased rigidly across the board.” said the person in charge of Tuhu’s car maintenance and tire business.
The tire industry is deeply bound to the petroleum industry chain.
Crude oil not only determines fuel costs, but is also the basis for the production of core raw materials for tires such as synthetic rubber, carbon black, and adhesives.
The above-mentioned dealer said that the commonly used calculation method in the industry is that if the crude oil price increases by US$10 per barrel, the production cost of a passenger car tire will increase by 8%-12%. Such an increase will directly squeeze the profits of manufacturing companies.
Geographical conflicts have also severely damaged the global shipping system, with transportation mileage, timeliness, and comprehensive costs increasing simultaneously.
The dealer mentioned that the lengthening transportation cycle and rising landed costs of natural rubber exports in Southeast Asia are further exacerbating the cost pressure on tire companies, and the risk of shortages is also emerging.
