AKRON—Dealers' costs continued to increase faster than prices in the first three months of 2000, according to respondents in Tire Business' Rapid Response Fax/E-Poll. However, spurred by the round of price increases announced recently by the major tire makers, most dealers expect to be raising prices in the current quarter.
Two-thirds of the respondents said they expect those recently announced price increases to stick, and if they do, 90 percent said they'd pass the increases on to their customers.
In the first quarter, for every dealer who had been able to raise prices (average increase—3.8 percent), two reported no change.
When it came to costs, the situation was reversed: Two-thirds reported cost increases averaging 6.5 percent, while nearly one-third reported no change. Almost no dealers reported decreases in either costs or prices.
One dealer in Oregon who plans to increase prices expressed some ambivalence about it: "I don't know: Tire prices have actually decreased over the past five years. I guess it's time for an increase."
A Wisconsin dealer was more resolute: "Even with tire price increases, we expect sales to continue the upward trend as we head into the spring/summer season."
A majority of dealers reported sales increases in all categories except commercial tires, where roughly 30 percent reported a decrease in sales, while another 30 percent reported no change.