Lower interest rates, tax cuts and lower VAT are all part of the Chancellor’s plan to kick start the economy. As the economy shrinks and competition gets tougher retail prices are constantly being shaved. How will all of this affect the price you pay for your tyres? Tyre prices have risen consistently over the last six years. This is largely due to increases in fuel and raw material costs. However, there are now signs that the economic slowdown is impacting on the tyre industry.
Lessening demand has now pushed natural rubber prices to a three year low, and this fact should be reflected on the tyre market. According to analysts Morgan Stanley, price cuts are already evident. However, thus far price reductions have taken the form of special ”four for the price of three” offers. Morgan Stanley predicts that during the next twelve months there will be more subtle, permanent price reductions.
This does seem to be the general trend. Encircle Marketing has monitored tyre prices for the year to the end of November. They compared 87,646 prices across 36 brands, and found that there were significant price reductions at the lower end and mid-price sectors. However, they found that many tyres at the top end of the market, especially run-on-flat tyres, were actually becoming more expensive.
Here at etyres we are seeing considerable growth in sales as customers look for the better value that is offered by buying on-line.