Published November 25, 2009 12:01 am - DETROIT (AP) — Tire prices are inflating.
Tariffs on imports, lower supplies and higher demand from drivers buying winter tires are combining to jack up costs.
Tire inflation: tariffs, demand push up prices
By DEE-ANN DURBIN
AP Auto Writer
DETROIT (AP) — Tire prices are inflating.
Tariffs on imports, lower supplies and higher demand from drivers buying winter tires are combining to jack up costs.
Goodyear, the biggest U.S. tiremaker, just raised prices. Other manufacturers will likely follow to offset U.S. tariffs on Chinese-made tires and the rising cost of raw materials such as rubber and oil. KeyBanc analyst Saul Ludwig sees prices up 5 to 10 percent by January, the start of a year when Americans are expected buy about 210 million replacement tires, according to the Rubber Manufacturers Association.
President Obama recently slapped a 35 percent tariff on tires after a U.S. union claimed an influx of Chinese imports has cost more than 5,000 U.S. tire workers their jobs since 2004. Those replacement tires account for around 17 percent of the U.S. market, up from 5 percent five years ago.
Lumped together under the tariff are tires made in China by major producers — including Michelin and Perelli — and tires made by Chinese manufacturers and sold in the U.S. under brand names such as Ling Long and Wanli.
But Chinese-made tires aren't the only ones getting more expensive.
Goodyear Tire & Rubber Co. will raise the price on all consumer replacement tires sold in North America by 6 percent starting Dec. 1. The Akron, Ohio-based manufacturer cited raw material costs. Goodyear imports about 2 percent of its tires from China, so the increase also could offset tariffs.