It was bound to happen sooner or later. The five-year ride of stable tire prices is officially over.
So announced the major commercial tire manufacturers over the past two months, with across-the-board price increases of up to 8 percent on entire product lines—including commercial vehicle, light truck and passenger vehicles—as commodity prices once again shadow the increasing price of petroleum and other raw materials.
Cooper Tire said during its fourth quarter and full-year 2016 results on Feb. 17 that raw material costs remain “volatile and difficult to project, but the company’s latest forecast anticipates raw material costs to be up approximately 25 percent year over year in the first half of 2017, with slight sequential increases throughout the balance of the year.”
Cooper’s tire increase went into effect shortly thereafter, with Bridgestone Firestone’s price increase hitting on March 1. It was no joke when Hankook Tire’s raised its prices effective April 1.
Michelin North America also said it is also raising prices by up to 8 percent, with increases being implemented separately by individual segments.
Included in these price increases, several of the manufacturers told us, are the new Low Rolling Resistant Tires that will be mandated starting next year. But the companies reiterated that the higher prices are due to increased costs of raw materials as well as technology enhancements and other “market conditions,” and not because of the federal Phase II rule on greenhouse gas reductions and increased corporate fuel economy of commercial vehicles.
Reprinted from the April 2017 issue of School Transportation News magazine.