US Shipments Down, But Pricing ‘Robust’

Preliminary US tyre shipment data shows that the North American light vehicle replacement market declined 1.3 per cent year-on-year in first quarter of 2007. This figure is seen as an improvement over the -4.5 per cent drop during the same period of last year, but is not enough for analysts to feel comfortable talking about recovery. However, Deutsche Bank analysts have reported that “pricing appears to be trending significantly better than expected.” Referring to Goodyear’s 4-5 per cent price increase effective1 April, the analysts added: “We believe that Cooper is likely to follow suit. Every 1 percentage point change in price translates to approximately $0.25 in earnings per share for both companies.”