
Many factors continue to exert upward pressure on fleet maintenance costs (with longer service lives as the primary driver).
Many factors continue to exert upward pressure on fleet maintenance costs (with longer service lives as the primary driver).
This video analyzes fleet sales and acquisition trends month over month; flat PM costs as some fleets base oil drain intervals solely on mileage; replacement tire expenses remain flat but increased interest in retreads as a result of cash conservation initiatives; and an uptick in unnecessary idling due to field workers using vehicles for social distancing.
Although prices for replacement tires increased 3% per unit per month in calendar-year 2019 compared to CY-2018, the per transaction tire costs were up less than 1% for fleets buying at pre-negotiated national account prices.
Most of the subject matter experts that we spoke to expect an increase in tire prices, although predicting future tire costs is difficult due to variables that influence tire pricing.
Fleets are being impacted by a variety of inflationary pressures ranging from higher acquisition prices due to the proliferation of onboard safety equipment, to increased material costs pushing up pricing on parts, upfits, and replacement tires.
Replacement tire prices are driven by raw material costs, which in CY-2019 were less volatile, but higher nonetheless. Tire prices increased slightly higher than the rate of inflation, which was partially offset by improvements in tread wear longevity.
Overall improved business conditions opened pent up demand for replacement units, especially in the oil sector and construction, which in the prior several years had scaled back new-vehicle acquisitions due to stagnant growth.
Upward cost pressures on replacement tires have emerged in 2018, due to higher cost for the commodities used to manufacture tires and the trend to larger diameter 17- to 18-inch wheels, which are more expensive to replace.
The leading commercial truck tire sizes of 2018, as reported by the U.S. Tire Manufacturers Association, includes the perennially popular 295/75R22.5.
Michelin North America Inc. will increase prices on its commercial tires on Dec. 1 by as much as 8%.
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