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August 22, 1994 02:00 AM

KELLY RAISING TIRE PRICES; OTHER FIRMS MAY FOLLOW

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    AKRON-Kelly-Springfield Tire Co. will increase tire prices 2 to 3 percent across the board on its Kelly, associate and private brand lines beginning Oct. 1, a company spokesman confirmed. Kelly said rising raw materials costs, particularly natural rubber, as well as higher costs associated with the new contract the company recently signed with the United Rubber Workers, necessitate the increase.

    Natural rubber prices hit a 5 1/2-year high in March. Bridgestone/Firestone Inc., which also is looking at raising prices, said its natural rubber costs have jumped 50 percent from 1993 levels.

    The Kelly spokesman noted that during the last price hike (in the spring), dealers and customers mainly took the increase out of their own tire margins. For the current price hike to stick, dealers will need to pass along the increase at the retail level. The net effect, he said, is that the retail price of a passenger tire would go up $1 to $1.50 per tire, depending upon the size.

    ``The value of the product deserves a better price,'' he said.

    Although representatives from most other tire makers agree a price hike is sorely needed in the industry, none have committed to such an increase to date.

    ``It actually is needed in the industry, and we actually need it,'' said Dan Wire, vice president of sales and marketing for Sumitomo Tire (U.S.). ``We're looking very strongly and favorably at an increase.''

    Mr. Wire said Sumitomo would be examining what other tire makers decide to do in terms of an increase before making its own determination. He noted, however, that the rising value of the Japanese yen in comparison with to the U.S. dollar has lowered raw materials costs in Japan while increasing labor costs. The net effect, he said, has been a declining return on Japanese imports to the U.S.

    A representative from Toyo Tires (U.S.A.) Corp. said that company also is facing problems with the rising costs of the yen and ``will join'' an industry increase should one occur.

    Representatives from BFS, Goodyear and Michelin North America Inc. said their companies were considering increases. Pirelli Armstrong Tire Corp., Kumho U.S.A. Inc. and Yokohama Tire Corp. said they were not considering an increase at this time.

    Dunlop Tire Corp. had no comment on the possibility of an increase. General Tire and Cooper Tire & Rubber Co. had not responded to calls by presstime.

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