BRUNEI - Tyre dealers are poised to raise prices in the coming months, with some vendors saying the adjustment could be as much as 10 per cent amid a sharp rise in the global prices of rubber.
"Tyre prices will be increased accordingly with the increase in price for rubber and other raw materials used in producing tyres," said Jasmain Tay, general manager of Hock Motor Company, distributor of Goodyear, Dunlop, Silverstone and Yokohama branded tyres.
He said that Hock Motor was still studying the move, hence any adjustments should not come into effect until July.
A representative from Sin Hup Huat Co, authorised distributor of Michelin tyres in Brunei, also said the firm would be raising prices, but did not comment further.
Guan Ho Hin, a dealer of branded tyres, would also hike prices sometime next month, an employee said. "The price will go up, maybe about 10 per cent, but exactly how much, it's difficult to actually say. It depends on the size and the pattern of the tyre."
Two weeks ago, French tyre maker Michelin announced it would be increasing prices to offset higher costs of raw materials rubber.
"Tight supplies in major producing countries like Thailand and Malaysia, and a spike in demand (worldwide)," are contributing factors for the volatility of rubber prices, according to wire agency Reuters.
World rubber prices were volatile for much of this year after surging in 2009 due to supply shortages.
In a press statement, Jean-Dominique Senard, one of Michelin's three managing partners, called the "violent increase" in rubber prices a "real issue" for 2010, saying that Michelin was going to ensure that sale prices reflect the rise in costs they are experiencing.
Prices could balance out again in 2013-14, he noted.
Michelin said it had suffered a 10 per cent drop in sales for 2009, during the global economic downturn when the tyre maker released its full-year results, citing rising rubber prices and an unclear market outlook as reasons for being "extremely vigilant".
Italian rival Pirelli & C SpA had also said it was considering raising tyre prices to offset raw material costs, including the cost of natural rubber.
Tay of Guan Hock Motor said freight prices were also a factor in the cost competitiveness of tyre products as they were directly shipped to Brunei from Europe. "If freight prices go down then of course it's going to be good."
He added that while it was something that needed to be addressed, high freight prices are generally similar to raw material prices, whereby the buyer does not have any control over it.
"Any increase in costing, for example (rubber or freight), will naturally increase overall prices for consumers," he said.
(motoring.asiaone.com)
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