The tire industry in mainland China is seeing a new wave of price increase this December.
According to CCTV Finance, this has been the tire industry’s third round of concerted price hikes since the fourth quarter. Costs for tire products are rising at an estimated pace of 3%, and some companies are expected to keep upgrading their product values until January 2022.
The prices in the first half of this year were 10% less. The adjustments were much more frequent particularly during this fourth quarter of the year.
Liang Junfeng, a tire dealer said some companies even increased their prices twice in November.
Liang said, “This year is probably the biggest change of this market in the past ten years. Frequent price increases like this year are also rare and of such magnitude.”
CCTV Finance affirmed that companies were forced to bump up the costs of their items because productions have been more expensive. The factors that affected the manufacturing process included, for example, rising coal prices and power cuts.
The paper noted that the climbing prices did not go in tandem with revenue. In November, the overall profit of the tire industry fell by more than 30% compared to the same period last year, marking a challenging period for the industry.
Lou Funan, General Manager of a tire company in Dongying Shandong, said: “Since the production cost cannot be digested through the increase in product prices, the competition in the whole tire market this year has become more intense.”