By Oliver Hall
Tyres manufacturers are scrambling to boost production output as economic recovery increases demand, according to a leading industry analyst.
Tyres industry expert Saul Ludwig, has reported in his regular column for the Modern Tyre Dealer magazine: “At the end of 2009, inventories of consumer tyres in manufacturers’ warehouses were 30% below those of December 2008 as inventories were slashed all through 2009.
“As demand has now picked up sharply (consumer replacement shipments in N.A. were up 13% and OE was up 55% in 1Q10 alone), manufacturers are feverishly scrambling to boost output to improve fill rates.
“It is these times when supplier loyalty pays off! As manufacturers increase purchases of tyre raw materials, those costs are surging and that is why tyre prices have to go even higher, in my opinion. As I see it, stay tuned for price hike announcements soon.”
Ludwig, who writes the ‘Ludwig Report’, is a managing director with Northcoast Research Holdings LLC based in Cleveland, Ohio. He concentrates on the tyre and chemical industries.