Continental Tire's Strategic Adjustment in Response to Increasing Costs
In a proactive move, Continental Tire of Germany has made a notice on January 5, 2024, announcing an upcoming tire price adjustment. Quoting the persistent high costs of raw materials, logistics, freight, and energy, the company predicts challenges in short-term improvements. The product purchase rates are set to be adjusted from February 1, 2024, with an expected maximum increase of +3%, reaffirming the brand's promise to delivering high-quality products and services.
Shift Across the Industry: Multiple Companies Align with Price Increases
The trend of price adjustments goes beyond Continental Tire. Wanli Tire, Zhengxin Rubber (China) Co., Ltd., and Shandong Linglong Tire have also made statements regarding price increases. Wanli Tire has implemented a 2%-3% increase for specific domestic PCR brands starting from January 2, 2024. Similarly, Zhengxin Rubber and Shandong Linglong Tire have communicated price increases of 2-3% and 1-3%, respectively, affecting various tire product series.
Factors Affecting Tire Prices: Raw Material Challenges and External Events
The basic driving force behind these price adjustments remains the continued rise of raw material prices, particularly evident in the rising cost of rubber. Recent external events, such as production reductions in Vietnam, floods in rubber-tapping regions, and suspensions in domestic production areas, have aided to supply chain challenges. The consequences of a major earthquake off the west coast of Honshu, Japan, and ongoing crises in the Red Sea have further enhanced market uncertainties.
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