AKRON-As some observers had predicted, the tire industry will undergo another round of price hikes this summer, the second of the year, due to escalating raw material costs. Led by Goodyear, eight tire makers have announced plans to increase prices by 2 to 9 percent on their replacement tire lines as early as May 26.
The companies cited the same reason that spurred the last round of price hikes in March, which ranged from 3 to 5 percent: the steady climb in raw material prices during the past year.
Over that period, natural rubber prices have doubled to more than 80 cents per pound, while synthetic rubber prices have jumped more than 30 cents per pound.
Details of the summer price increases announced thus far follow:
Goodyear will boost passenger and light truck prices 3 percent; commercial, truck, farm and industrial tires, 3 to 5 percent; and off-the-road tires, 5.5 to 8 percent-all effective June 1.
Continental General Tire Inc. will hike prices 3 percent on its passenger and light truck lines, and 4 to 8 percent on all its commercial lines, effective June 5.
Dunlop Tire Corp. will raise its prices on passenger, light truck and medium truck tires an average 3.5 percent on June 1.
Kelly-Springfield Tire Co. will jack up the prices of commercial tires-medium truck and front and rear farm tires-by 3 to 9 percent, effective June 1. Prices for passenger and light truck tires will rise 2.5 to 4 percent, beginning July 1.
Bridgestone/Firestone Inc. will up prices of Bridgestone, Firestone and Seiberling brand tires and tubes, effective July 1. Passenger and light truck tire prices will increase up to 3 percent, while those of commercial truck/bus tires will climb 2 to 4 percent.
Yokohama Tire Corp. will boost prices 3 to 5 percent on all Yokohama and Mohawk brand tires, effective May 26.
Sumitomo Tire (U.S.) will implement price increases of 3 to 5 percent on all product lines Aug. 1.
Toyo Tire Corp. will raise prices 5 percent June 1 on its off-the-road tires, because they contain more natural rubber than other types of tires, a Toyo spokesman said. The company is considering price hikes on its other lines, he added.
Kumho U.S.A. Inc. and Pirelli Armstrong Tire Corp. said they are reviewing the situation, while Cooper Tire & Rubber Co. and Michelin North America declined to comment.
``The price hikes appear to be in line with the raw material costs,'' said Analyst Harry Millis of Fundamental Research Inc. The varying sizes of the increases reflect the varying amounts of raw material in different types of tires, he added.
Because the hikes are directly tied to the spiraling costs, whether or not the increases stick depends on what happens to raw material prices, he said.
``Most people expected material prices to level off at the end of the first quarter, but they didn't,'' Mr. Millis said. ``If these (raw material) prices level out, the price increase will stick. Prices would have to actually decline for the hikes to erode.''