AKRON-Goodyear, Michelin and Bridgestone/Firestone Inc. have joined the growing list of manufacturers raising flag brand prices 3 percent this spring. Meanwhile, General Tire is increasing prices 3 to 4 percent on its private brand lines, effective April 1, joining other suppliers who are trying to recoup margins in custom and associate brand production.
Goodyear's March 1 price hike affects all its replacement tire lines, except farm tires.
Michelin North America will raise prices April 1 on its Michelin, BFGoodrich, Uniroyal, Riken and Kluber brand passenger and light truck tires, and on its Michelin brand truck, industrial, off-the-road and earthmover tires.
BFS will boost prices 3 percent on all Bridgestone and Firestone lines, except OTR tires, effective April 1. The company raised OTR prices 2.5 to 8 percent at the beginning of the year.
Earlier, Dunlop Tire Corp. and Cooper Tire & Rubber Co. announced 3-percent price hikes across the board. Denman Tire Corp. boosted its tire prices 2 to 2.5 percent on light truck and OTR lines Jan. 1.
These adjustments come amidst a string of price hikes on private and associate lines, intended, according to analysts, to recoup margins lost through aggressive competition in the market last year.
In addition to General's increase, Dayton Tire, a unit of BFS, will raise associate and private brand prices 3 to 5 percent, while Kelly-Springfield Tire Co. and Michelin will up prices 3 percent March 1.
As usual, analysts are pessimistic about the survival of the price hikes-predicting tire prices will only rise about 1.5 percent-due to competitive pressures.
Several manufacturers blamed rising production costs for the need to raise tire prices.
However, analyst Harry Millis of Fundamental Research Inc., claimed that while labor costs are rising, raw materials costs have been favorable lately. When price increases are issued only to improve margins, they rarely stick, he said.
Analyst Donald DeScenza of DeScenza & Co., agreed that raw material costs have been stable. So if the manufacturers can realize at least half their increases, he said, ``it would be a tremendous benefit to their profits.''
Although he contended that abandoning the practice of discounting-which has undermined previous rate hikes-would do more for profit realization than the price increases themselves.