Some drivers may be noticing they are paying more for tires, and it may simply be because the vehicle they are driving comes with bigger wheels. A new set of trade tariffs also threaten to raise prices.
The rise of the sport utility vehicle in America has also led to the rise of the SUV tire, which is often pricier than a tire for the smaller wheels historically found on passenger cars such as sedans.
One 2019 survey from Consumer Reports found the median customer was spending $137 on a a tire for a sedan, coupe, hatchback or minivan, not including the cost of installation. The price for an SUV tire was $162. Pickup trucks were even more expensive, at $175.
Different forces have been exacting contrasting influences over tires and their pricing. A small but significant slice of consumers are buying tires online – and retailers such as Amazon are thought to have a “modest” impact on tire selling, in the words of analyst John Healy of Northcoast Research.
At the same time, the trend toward sport utility vehicles, pickup trucks, and even larger diameter wheels on sedans and sports cars is favorable toward premium large tiremakers with premium brand names, such as Michelin, Goodyear and Bridgestone.
Further upsetting tire market share are looming tariffs on four Southeast Asian countries that could disproportionately affect lower-priced tire brands, favor domestic American ones and raise prices.
“The recent tariffs that have been preliminarily determined affect almost 30% of the entire U.S. consumer tire market and at an average tariff rate of 30%,” said Keybanc analyst James Picariello. “So we’re talking about a significant impact that doesn’t go away.”
Source: Business - cnbc.com
