Why tire agents do not follow manufacturers to increase prices

Jan 05,2019

Recently, the 2018 China Rubber Annual Conference released data on China's tire industry in 2017.

The data showed that last year, China's total automotive tire production was about 653 million, up 7.05% year-on-year, and sales revenue increased by 14.99% year-on-year, but the profit drop was as high as 49.56%.

The reason for this is mainly affected by raw material price fluctuations, the entire tire industry is hardly optimistic.

And by this year, this situation has not been effectively improved.

It is understood that since January 1, 2018, the price of tire raw materials, including natural rubber, has continued to rise.

Especially by February, Thailand, Malaysia, Indonesia and other rubber exporting countries announced a reduction in rubber exports, resulting in the global price of natural rubber from the beginning of the year 1.40 U.S. dollars per kilogram, rose to 1.55 U.S. dollars per kilogram, an increase of 10%.

From the beginning of March, domestic tire products ushered in another wave of price increases, ranging from 3% to 10%.

By mid-March, Zhengxin, Wanli, double money, double star and other tire brands, one after another, announced that from April 1 onwards, price increases, the rate of increase ranging from 2% to 5%.

Zhengxin tire said, from April 1, the brand's products across the board price increases, an increase of about 2%; and Wanli, double money, double star tire brands, this is not comment.

Zhengxin tire marketing department, a staff member further said that this round of price increases for the agents, the terminal market price increases, depending on how the agents specifically.

"Some agents are factories up, they also follow the rise; some agents may have inventory, or to maintain sales and do not increase prices, relying on their own to digest the manufacturer's price increases." He said.

Zhengxin tires, an agent said, at present, most of its tires for sale are March inventory.

The price of tires with a specification of 195/65 R15, for example, fluctuates around 400 yuan, an offer given in accordance with the price of March stock.

"Our price is based on the incoming price of the month. If the incoming price of the month is high, we will follow the high, if it is low, we will follow the cheap."

Query Tuhu car maintenance network can be found, with the above same tires, the current price of 375 yuan.

Touhou car care related person in charge said, Touhou online tire price change is not big.

"This round of manufacturers to increase prices is relatively small. We also only received a very small number of tire manufacturers to increase prices, so there is no initiative on the Tuhu platform now."

The person in charge believes that because tire consumption is relatively low-frequency, consumers are not very sensitive to price. In addition to change the tire is just need, even if the price increase, when you need to change can not wait.

The relevant person in charge of the China Rubber Industry Association said that the trend of domestic tire prices is relatively stable.

According to forecasts, in 2018, domestic tire production is about 676 million, an increase of 3.5% year-on-year. However, under the influence of raw material prices and other factors, the task of industry-wide structural adjustment and resolving rising costs is still very difficult.