Stormy Outlook for Tyre Manufacturers – Business Week

The outlook for global tyre manufacturers looks like being “a bumpy ride”, says Business Week. With the global tyre business worth an estimated US$70 billion, the major players are facing pressure from increased raw material prices and the growing burden of employee benefit costs.

In the past, these have been offset by increasing production efficiency, cutting costs and increasing prices. However, this will become more difficult in the future, with uncertainty over car production volumes, high capital expenditure and R&D costs and the continued volatility of raw material and energy costs. In a global business, foreign exchange factors can also have a significant effect.