Why don't tire agents follow manufacturers to raise prices


Recently, the 2018 China Rubber Annual Conference announced the 2017 China tire industry data.

Data show that last year, China's total output of automobile tires was about 0.653 billion, an increase of 7.05 percent year-on-year, and sales revenue increased by 14.99 percent year-on-year, but profits fell by as much as 49.56 percent.

The reason is mainly affected by the fluctuation of raw material prices, and the situation of the whole tire industry is hardly optimistic.

This year, the situation has not been effectively improved.

It is understood that since January 1, 2018, the prices of tire raw materials, including natural rubber, have continued to rise.

Especially in February, Thailand, Malaysia, Indonesia and other rubber exporting countries announced to reduce rubber exports, resulting in global natural rubber prices from the beginning of the year 1.40 US dollars per kilogram, rose to 1.55 US dollars per kilogram, an increase of 10%.

From the beginning of March, domestic tire products have ushered in a wave of price increases, with increases ranging from 3% to 10%.

By mid-March, Zhengxin, Wanli, Shuangqian, Shuangxing and other tire brands had announced price increases from April 1, ranging from 2% to 5%.

Zhengxin Tire said that from April 1, the price of its products across the board increased by about 2%, while tire brands such as Wanli, Shuangqian and Shuangxing declined to comment.

A staff member of Zhengxin Tire Marketing Department further said that this round of price increase is aimed at agents, and whether the price increase in the terminal market depends on how the agents operate.

"Some agents are factories that rise, and they follow suit. Some agents may not raise prices because they have inventory or to maintain sales, relying on themselves to digest the price increases of manufacturers." He said

An agent of Zhengxin Tire said that at present, most of its tires on sale are in stock in March.

Take the tire with the specification of 195/65 R15 as an example, the price fluctuates around 400 yuan, which is the quotation given according to the purchase price in March.

"Our price is based on the price of the goods in the current month. If the price of the goods in the current month is high, we will follow the high, if low, we will follow the cheap."

According to the Touhu Car Maintenance Network, the current price of the same tire as the above is 375 yuan.

The relevant person in charge of Tuhu's car maintenance said that the price of tires on Tuhu's Internet has not changed much.

"This round of manufacturers' price increases is relatively small. We have only received very few tire manufacturers' price increases, so there are no measures on the Tuhu platform now."

The person in charge believes that due to the relatively low frequency of tire consumption, consumers are not very sensitive to prices. In addition, it is just necessary to change tires. Even if the price rises, you cannot wait when you need to change tires.

The relevant person in charge of the China Rubber Industry Association said that the trend of domestic tire prices is relatively stable.

It is predicted that in 2018, domestic tire production will be about 0.676 billion, up 3.5 percent year-on-year. However, under the influence of factors such as raw material prices, the task of restructuring the entire industry and resolving rising costs is still very arduous.