Since late September, there has been a new wave of price increases in the domestic tire industry, with domestic and foreign tire brands, including listed companies such as Sailun Tire, Linglong Tire, and Triangle Tire, announcing price increases of varying degrees.
Similar to the entire vehicle market, the tire industry also follows the pattern of "nine gold and ten silver". Currently, major dealers are actively stocking up to cope with the peak sales season in October. The rise in raw material prices and labor costs has brought practical pressure to the prices of tire products. The tire industry is currently in a state of thriving production and sales, and the industry's prosperity is expected to continue to rise.
Intensive price increase by tire manufacturers
Recently, several listed tire companies have announced price adjustments before October 1st, with price increases ranging from 2% to 6%. The main reasons cited by the companies are factors such as raw material costs.
Linglong Tire stated that starting from September 27th, it will increase the invoicing prices of all PCR brands and product series in the company's domestic retail market by 2% -5%. It will also increase the invoicing prices of all TBR brand and product series in the company's domestic retail market by 3% -6%.
Starting from September 20th, Sailun Tire will increase the price of TBR (Radial Tire) products by 2% -3%, and starting from September 27th, it will increase the price of PCR (Passenger Radial Tire) brands by 3% -5%, including Sailun Tire, Luji Tire, Black Eagle Tire, Ruiketu Tire and other brands.
In terms of triangular tires, starting from September 25th, the prices of various product series of passenger tires will be increased by 3% -5%, and the prices of various product series of commercial tires will be increased by 2% -3%; Qingdao Shuangxing will also increase the prices of passenger tire products by 2-4% from October 1st. In addition, listed tire companies such as Senqilin, Guizhou Tire, and Pulin Chengshan have also joined the price increase army. So far, more than 50 domestic and foreign tire companies have announced price increases, with the price increase generally implemented in late September.
The price increase has come too suddenly, almost unprepared, "a tire dealer told reporters. Unlike previous notices of about a month in advance, tire companies have been very tight in terms of price increases recently, with some companies raising prices on the same day of notification. Currently, some brands have tight tire supply and are optimistic about tire sales in October.
What are the reasons behind it
The increase in tire manufacturing costs is almost the same reason for all tire cars with increased prices. It is understood that since the beginning of this year, the prices of tire raw materials have fluctuated at high levels, and have recently returned to high levels. With the rise of raw material prices and the arrival of the "Golden Nine Silver Ten" tire sales peak season, it seems inevitable that tire companies' costs will rise.
From the perspective of raw materials, the prices of major raw materials for tires, including styrene butadiene rubber, cis-1,4-polybutadiene rubber, and carbon black, have recently increased significantly. In synthetic rubber, cis-1,4-polybutadiene rubber increased to 13900 yuan per ton, a month on month increase of 21.93% and a year-on-year increase of 9.45%. Styrene butadiene rubber rose to 13700 yuan per ton, a month on month increase of 15.13% and a year-on-year increase of 16.6%. The price of carbon black rose to 9800 yuan per ton, a month on month increase of 8.89%.
At the same time, the prices of additives have also significantly increased, with antioxidant reaching 31000 yuan per ton, an increase of 29.17% month on month; The promoter CZ rose to 24000 yuan per ton, an increase of 17.07% month on month. The rise in prices of various raw materials has led to an increase in tire manufacturing costs.
In addition to raw materials, labor and manufacturing costs are also increasing in the cost structure of tire companies. Industry insiders have stated that since last year, the impact of rising prices of energy sources such as electricity, natural gas, and coal on tire production costs has been comparable to the increase in raw material prices. At the same time, domestic labor costs have continued to rise, and China has become a region with higher labor costs except for Europe, America, and Japan.
Accelerated industry reshuffle
Since the beginning of this year, along with the rise in tire and raw material prices, there has also been an industry reshuffle. According to incomplete statistics, some places have seen tire dealers close or go bankrupt.
This is a normal market pattern. Eliminating some weak and poorly managed stores and concentrating advantageous resources on brand stores with strong business capabilities can achieve healthy and sustainable development of the entire industry. "An industry expert said that 30 years ago, there were very few tire dealers in various regions, with a profit of hundreds of yuan per tire. If one of the commonly used tires has a factory price of less than 200 yuan each, the dealer can sell them for nearly 500 yuan. However, after entering the market economy, coupled with the gradual entry of foreign tire brands into the domestic market, the supply of mid to low end products of domestic tire enterprises has gradually exceeded demand, and profits have also significantly decreased. At a certain stage, the tire dealer industry will inevitably undergo a "reshuffle" to achieve current industry adjustments.
The fluctuation of the market and the acceleration of 'reshuffle' are not all companies that can be affected. Just like sailing at sea, the larger the hull, the stronger the ability to withstand wind and waves. "Chen Chen, a researcher at Longwan Lake Think Tank, said in an interview with China Automotive News that some tire companies and dealers with brand scale advantages, strong technical strength, and high management efficiency can better cope with market changes in competition, Maintain a relatively stable operating and profit level. Therefore, continuously improving one's market competitiveness is the fundamental element in responding to various market storms.