Positive Economic Trend in View for Tyre Industry

The rating agency Standard & Poor’s (S&P) has warned tyre manufacturers that a break down in margins maybe on the horizon. The advice follows gleaming profits and figures from a number of manufacturers. S&P singles out Continental and Cooper for praise about their cost structures, adding that even the companies it considers to be well organised still risk being stung by raw material costs, which are responsible for 20 to 30 per cent of the turnover. S&P says it is concerned that due to tough competition it could become difficult to pass rising raw material costs on to the customers, and therefore margins would be under threat.