Tire companies are welcoming price increases, why consumers can’t feel it?

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Recently, many domestic companies have issued price increase letters, announcing that they will collectively increase tire product prices in early December. Domestic listed tire companies such as Sailun Tire, Guizhou Tire, and Sen Kylin have generally increased prices between 3% and 5%. Many companies It is not the first time this year to issue a price increase notice, but the reporter visited offline stores and found that the price of car has not changed, and some models have reduced prices instead.

Another wave of price increases at the end of the year

Following the collective price increase of tire companies in November, many tire companies issued notices again to raise product prices in December.

On November 30th, Sailun Tire issued a price increase letter stating that starting from December 1st, the company’s product prices will increase again by 3% to 5%. Sen Kirin issued a price increase notice on the same day, saying that due to the recent increase in raw material costs to varying degrees, production costs have continued to increase, and since December 1, 2020, the company will adjust the prices of the entire series of products. The Guizhou Tire Price Increase Letter shows that the product price increased twice in December, the first price increase was 1% to 2%, and the second price increase was 2%.

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This collective price increase is not the first time this year. Since October, more than 40 domestic tire companies have issued price increase notices. Major domestic tire manufacturers such as Zhongce, Fengshen, Linglong, Zhengxin, and Doublestar have increased their prices. Foreign-funded tire companies such as Giti have also kept up, with a cumulative price increase of more than 5%.

In addition to listed tire companies, local tire companies in the island city also have price increases. The reporter learned from many tire companies that tire products have an intention to increase prices, with the increase concentrated in 3%-5%, and some companies have increased by 10%.

Rising prices of raw materials such as rubber and carbon black are still the main reasons for price increases

“This time the price increase is due to the price increase of raw materials.” The reporter called Sailun Group and other Qingdao tire manufacturers. The relevant person in charge said that due to the increase in the price of natural rubber, carbon black and other tire raw materials, the higher manufacturing cost is still the current price. The main reason for the upward adjustment.

Tire raw materials mainly include natural rubber, synthetic rubber, carbon black, etc., of which costs account for the largest proportion, and fluctuations in rubber prices have a greater impact on tire production costs. The reporter learned that due to the impact of the climate, domestic rubber tapping activities have been hindered this year. Foreign countries and Southeast Asia’s main natural rubber producing areas have experienced a year-on-year decline in output. This represents a decrease of 8.7% over the same period of the previous year. It is estimated that the total output in 2020 will decrease by 6.8% over the previous year. In addition, warehouse receipts inventory remained low and pushed up prices, leading to rising prices of natural rubber.

As a reinforcing material in tire production, carbon black can improve rubber strength and enhance wear . Affected by the high demand in the downstream industry chain and the elimination of backward production capacity, domestic carbon black prices have continued to rise since the third quarter. Data show that since this year, the price of carbon black has increased by 31%, and the price of carbon black has increased by more than 60% since the beginning of June.

The decline in the carbon black market has also exacerbated the tight of the carbon black market. According to published data, the carbon black market has started to decline in November compared with the previous month. Carbon black companies started operating 72.92% on average, down 1.89% from the previous month. Huachuang pointed out that the heating season in the northern region will further affect the operating rate of the coal tar-carbon black industry. In the context of the higher operating rate of the downstream tire industry and the urgent demand for carbon black replenishment, carbon black Prices may maintain an upward trend.

Daocheng Tire Sales Store: No price increase notice has been received yet, car owners don’t worry

“The price of rubber has risen a lot this year, but the price of our store has not fluctuated much.” In an automobile repair center in Nanjing Road, Shinan District, a staff member who was changing tires answered the car owner’s question, “Many customers called to ask Don’t worry too much about price increases.”

A certain 14-inch tire displayed in the store is priced at 380 yuan, and many of them have a discount. A staff member introduced to the reporter, “This year, the price of car tires in our store has not increased. The tires reacted to the price increase of raw materials. There is a lag period because agents need to digest inventory.” The reporter learned that the tires in the store are mainly from Michelin and SAIC’s self-produced brands, and other domestic brands account for a relatively small proportion.

On the afternoon of December 3, the reporter visited a number of tire sales shops in Daocheng, and the responses received were “No price increase for the time being”. Several staff members said that there is a transmission period for the price increase of upstream tire manufacturers. In order to destock, some models will reduce prices instead.

The staff of an automobile service chain store in Laoshan District also responded to the reporter, “Now many car owners choose to buy tires online. If we increase the price, the price will not be competitive. The impact of the manufacturer’s price adjustment is nothing more than a lower margin.” In addition, there are some sales stores. The staff said that in addition to reducing profit margins, canceling some preferential policies is also a way to digest price increases, and car tire dealers generally have inventory pressure, and it is difficult for tire companies to increase prices to stimulate dealers’ enthusiasm for purchasing.

“Our purchase price is much higher, but we have to say how much higher the product is.” A dealer of a tire company in Qingdao told reporters that in the tide of tire price increases, different products have different price increases, which have different impacts on consumers. , The price increase of engineering tires and truck and bus tires is relatively obvious, while the increase of car tires is relatively small. “There is no change in . A tire can last three or four years, but drivers who run long-distance freight are frequently changing tires. They are more worried. With the increase in prices, many truck drivers this year report that a tire has risen by one or two hundred.”

The domestic automobile industry is booming in production and sales, and the tire industry’s listed young enterprises are increasing and expanding production

There are obvious signs of recovery in domestic automobile consumption. The October automobile industry production and sales situation announced by the China Automobile Association shows that in October this year, my country’s automobile production and sales reached 2.552 million and 2.573 million respectively, a month-on-month increase of 0.9% and 0.1%, and a year-on-year increase of 11% and 12.5%. my country’s automobile production and sales have shown positive growth for 7 consecutive months, and sales have maintained a growth rate of more than 10% for 6 consecutive months.

Favorable policies continue to increase, further helping the auto sales market to recover. Recently, the executive of the State Council made it clear that the firm will firmly implement the strategy of expanding domestic demand, further promote bulk consumption and key consumption, and release the potential of rural consumption. The first step is to stabilize and expand automobile consumption.

The recovery of the automobile industry has led to an increase in tire demand and boosted the increase in the production capacity of leading companies. Listed young companies in the tire industry have begun to deploy. The staff of Sailun Group told reporters that the annual production of 3.3 million sets of high-performance intelligent all-steel tires in Sailun Shenyang has been officially put into production, and the expansion project of high-performance semi-steel radial tires of Sailun Tire’s Dongying plant is underway. Increased 7 million sets. As one of the leading tire companies in China, with the boom in the downstream automobile industry, Sailun Tire’s tire production and sales in the third quarter hit a record high. The third quarter report shows that the tire production and sales in the third quarter were 11.6107 million tires. 12,131,100 pieces, with a production-sales ratio of nearly 105%, a single quarter sales growth of 17.38% year-on-year, an increase of 34.09% month-on-month. In the first three quarters of this year, Sailun Tire produced 29,619,500 tires and sold 30.72 million tires.

News on the financing and expansion of head tire companies continues. On November 17, Sen Kirin announced that it plans to raise about 2.2 billion yuan through the issuance of convertible bonds, and all invest in an annual output of 6 million high-performance semi-steel radial tires and 2 million high-performance semi-steel radial tires. Expansion project of performance all-steel radial tires.

Mori Kirin landed in the capital market on September 11. According to its third-quarter report, it achieved operating income of 1.399 billion yuan in the third quarter, a year-on-year increase of 22.33%, and a single-quarter net profit of 331 million yuan, a year-on-year increase of 73.47%. .

Translated by from http://www.cria.org.cn/newsdetail/57515.html

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