While Pirelli and Toyo shares – although only from time to time – displayed an upward trend in February, most of the other important tyre manufacturers (for example Bridgestone, Continental, Cooper, Goodyear and Michelin) were among the losers. Their shares have fallen to a new 52-week low, but shares in Yokohama rose 20 per cent at the end of February.
Yokohama Rubber’s share price surged by at the end of February. Analysts are speculating whether this marks the beginning of a new round of consolidation in the tyre industry.
As part of a policy to consolidate truck tyre production under one roof, Yokohama Rubber Co Ltd has announced it will phase out production of truck and bus tyres at its Hiratsuka, Japan plant by the beginning of 2002. All radial truck and bus tyre will then be produced at the company’s larger plant in Mie, Japan and the Hiratsuka plant will concentrate on the production of non-tyre products.
Following price increases of between 3 and 5% by Cooper, Goodyear, Pirelli and Yokohama in the US market, Michelin is increasing its prices of passenger car and light truck tyres by 5%. Tyre manufacturers need a minimum price increase of 3% merely to compensate for the 8% increase in raw material costs (rubber, oil, carbon black).
While Toyo shares dropped at the end of April/beginning of May, those of two other Japanese manufacturers, Bridgestone and Yokohama, gained. The share prices of Continental, Cooper, Goodyear and Michelin too.
Bridgestone is to join Goodyear, Continental, Michelin, Cooper, Pirelli, Yokohama and others in raising tyre prices in the USA to compensate for raw material price increases. Effective June 1st, Bridgestone tyre prices will rise 4%. Historically, Bridgestone has taken advantage of other manufacturers’ price increases in order to gain market share, so this latest announcement seems to indicate that this time the price rises will stick.
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