Yokohama led Japanese domestic tyre price increases – analysts

Financial analysts from Deutsche Bank commented that Yokohama’s recently reported third quarter operating profit margin declined 2 percentage points year-on-year to 11.9 per cent because “price hikes offset only 2.7 billion yen of the 7.8 billion yen of impact to profits from rising natural rubber and other raw materials prices.” They also observed that the company did not alter its guidance due to “uncertainty regarding trends in raw materials prices and foreign exchange rates.” Instead Yokohama, as Toyo subsequently did, announced plans to hike the price of its replacement tyres in the domestic market.

Yokohama plans to hike the price of its passenger vehicle tyres by an average of 7 per cent from 1 April. It had already announced plans to hike truck/bus tyre prices from 1 March. This will be its first hike to passenger tyre prices in the domestic market since Sept 2008. “We expect a maximum boost to profits of around ¥10 billion, but a key point will be whether the competition will follow its lead,” Deutsche Bank concluded.

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