You just bought a 2007 Corvette that has relatively few miles on it for $25,000. But it needs a new set of tires, and the $1,500 price on those tires might flatten your satisfaction in a hurry.
Costs are soaring for some replacement tires, particularly those that have big tread, big diameters and higher speed ratings. Tire prices have risen as much as 30 percent in the past 3 years for equally sized and constructed models. You now easily can spend $800 for four name-brand replacement tires for an average four-door car.
OVERINFLATED. What’s driving prices higher? For starters, you can blame the cost of raw materials.
Surges in the price of oil and natural rubber lifted tire prices throughout 2011, says Denise Koeth, who is the managing editor of Tire Review, which is a trade journal. (Petroleum byproducts are used in the manufacture of tires, and it takes fuel to transport the heavy, bulky goods.) Last fall, raw-materials costs prompted Bridgestone to hike its prices by 8 percent, Goodyear to increase its prices by 5 percent and Michelin to bump its prices by 9 percent. At press time, gasoline prices had eased, and Association of Natural Rubber Producing Countries announced that producers of natural rubber were able to ramp up supplies faster than they had expected. But the situation is changing almost daily, and we’ve seen nothing to indicate that consumers will get a break from the high prices in 2012.
An East vs. West trade spat also contributed to higher prices. China has become a huge player in the manufacture of tires by supplying major U.S. brands as well as pumping out passenger and commercial tires under its own brands. By 2008, the sales of cheaper, imported Chinese tires reached 46 million units—about one-sixth of the U.S. market.
Pressure on Tire-Makers
But in September 2009, the Obama administration slapped a steep 3-year tariff on imported Chinese tires. In 2010, the tariff’s first year, the penalty was 35 percent; in 2011 it was 30 percent; and this year it will be 25 percent. It didn’t take long for the tariff to have an effect. In 2010, which is the most recent year for which data is available, the number of lower priced Chinese-made tires that were imported into the United States was down 23.6 percent from 2009 levels. As a result, North American tire retailers scrambled to find tires as inventories became scarce, and manufacturers searched for other suppliers.
“It’s likely that tires will become more expensive with each passing year,” Koeth says. “But by how much, we can only speculate.”
And the relentless growth of the ultrahigh-performance (UHP) tire segment is another factor that’s driving up tire prices. Roughly 19.5 million UHP replacement tires were shipped in 2009, according to Rubber Manufacturers Association (RMA), which is a trade association for tire manufacturers. The sales of UHPs were expected to reach 24 million units in 2011, RMA says.
Traditionally, the tire industry has considered any tire that has a “V” speed rating (149 mph or higher) to be a UHP tire. From the sound of the name, you might expect UHP tires to be found strictly on fire-breathing muscle cars. But many of today’s mainstream cars and crossover SUVs—including the Acura MDX, Ford Fusion, Honda Accord, Hyundai Sonata and Toyota Camry—now come off the assembly line equipped with UHP tires that the tire-maker built to the auto manufacturer’s specs. In other words, manufacturers are throwing pricier UHP tires onto vehicles that don’t need them. And these companies persuade you to shell out big bucks by urging you to follow the manufacturer’s recommendations when buying replacement tires.