21 April 1995

Hike for tyre prices

MORE expensive tractor tyres are in the offing as manufacturers pass on what they describe as "rocketing raw material prices", writes Peter Hill.

Goodyear put up prices for its tractor fronts by 10% and drive tyres by 14% a fortnight ago. This week Pirelli has followed suit with an average 13.8% price hike.

Michelin claims to have offset some of the cost increase by improving productivity at its farm tractor tyre plants in Spain and France. Nevertheless, Januarys 7% price increase will be followed by another "small increase" within the next two months, predicts UK agricultural sales manager Geoff Holmes.

The increased demand for new tractors, coupled with production difficulties in the United States, has put tyre manufacturers in the rare position of seeing demand far outstrip supply. But the tyre makers insist the current round of price increases stem from raw material costs not market forces.

Phil Stanton of Goodyear comments: "The cost of all materials used to produce tyres has gone up, with natural rubber increasing by more than double since the middle of last year."

Tyre makers have done their best to crank up production to cope with significantly more buoyant demand for farm tractors over the past two years. But there is a limit to what they can do.

"Things had eased a bit, and we managed to build up stocks over the winter months," says Pirellis Wayne Nickless. "But switched-on dealers in the agricultural trade were aware of the price rises coming through and bought forward – depleting our stocks again."

Goodyear says most sizes in its range are also in short supply, and its much the same at Michelin. &#42