AKRON - Five tire makers are ringing in teh new year with a fresh round of price increases in the 3-percent range on passenger and light truck tires. The reason is the same one given for a series of price hikes last year: high raw materials costs.
"Rising raw material costs, which we thought would peak in the third quarter and would dissipate back down, in fact have not come down and continue to stay at high levels," said Eugene Culler, executive vice president, North American tires, for Goodyear, which raised prices 3 percent Jan. 1.
As of Jan 3, all announced price increases wer 3 percent and incr=luded: Yokohama nad Mohawk brand consumer and commercial tires, effective Jan. 2; Kelly and its associate brand consumer lines, Feb. 1; and Toyo tires, Feb. 1.
Cooper Tire & Rubber Co. told its dealers it would hike passenger and light truck tire prices 3 percen ton Feb. 1.
Other tire makers, including Michelin North America, Bridgeston/Firestone Inc. and continental General Tire, either had no plans for price increases or had no announcemnts yet.
The ongoing justice Department investigation into possible tire industry price-fixing apparently hasn't deterred tire makers from seeking price increases en masse.
"Everyone in teh indsutry faces the same situation," said analyst Harry Millis of Fundamental research Inc. Currently, that situation includes high material costs and lower demand.
Although material costs have stopped ballooning, tire prices still are relatively weak and a price hike would bring them back to a realistic level, according to Mr. Millis. "I think it is needed. . ."
Mr. Millis said he hopes the increases stick, but would be suprised if they do. Whether the increases survive should be clear within three months.