By Dan Leone and Jonathan S. Reiskin, Staff Reporters This story appears in the Nov. 8 print edition of Transport Topics.
North American truck tire manufacturers have imposed a new round of price increases, generally about 8%, citing higher raw material costs that coincided with greater tire sales and some reports of tire shortages.
It was the tire makers’ second general price increase this year; the first was in May, after commodity prices spiked in April.
Commodity price reports show crude oil nearing its high price for the year, while rubber and steel prices are mixed — lower than peak levels in April but higher than at the start of the year.
Bridgestone Americas said Nov. 1 that its heavy- and medium-duty truck tire prices would increase as much as 8%, along with many of its other prices.
Goodyear Tire & Rubber Co. spokesman Jim Davis confirmed that the company told its dealers of a similar 8% increase, as of Oct. 1.
Michelin North America spokeswoman Amy Friess said the company has “nothing to announce now.”
Yokohama Tires said it would increase prices for car tires by 8% on Dec. 1, and a company spokesman said a notice on truck tires could follow this week.
The previous major round of price increases for tires started around May 1, after commodity prices shot up in April (click here for previous story). Commodities dropped sharply at the end of April, a time that coincided with bad news about government debt in Europe, particularly in Greece.
Tire companies have been reporting better sales in their earnings statements, reflecting the gradual recovery of the industrial economy. However, they also mentioned higher raw material costs, which drove a quarterly loss for one producer.
Goodyear, the largest U.S. tire manufacturer, posted a $20 million net loss in the third quarter as higher material costs and one-time charges offset the highest quarterly sales figures the company had booked in two years.
The Akron, Ohio, manufacturer lost 8 cents a share for the quarter, compared with a profit of $72 million, or 30 cents a share, in the 2009 quarter.
Quarterly revenue rose to about $5 billion, compared with $4.39 billion in the year-ago quarter, Goodyear said.
Rubber on the Tokyo Commodities Exchange peaked on April 23 at the equivalent of $4.80 a kilogram. The price fell by 37% through Sept. 17 but has been rising since then.
Steel on the London Metal Exchange sold for $595 a metric ton in early April before dropping to $400 in mid-June, but it has risen above $500 since then.
Goodyear said in its Oct. 28 earnings statement that it swung to a loss in the quarter just ended after raw material costs shot up by $412 million and the company racked up $56 million in one-time charges.
In North America, Goodyear’s largest market, quarterly sales rose 17% from last year to $2.2 billion. Original equipment unit volume in North America increased 12%, and replacement tire shipments were up 3%, Goodyear said.
At Michelin & Cie., the world’s second-largest tire maker, third-quarter sales rose to about $6.01 billion from about $5.36 billion a year ago.
Sales of heavy-truck tires surged 27% to about $1.98 billion in the quarter, Michelin reported Oct. 26.
For Cooper Tire & Rubber Co., Findlay, Ohio, quarterly net earnings fell $2 million year-over-year to $47 million. Quarterly revenue declined to $803 million from $883 million, Cooper said Nov. 1.
