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Tire Costs

Forecast of Tire Prices in 2021

The ultimate outcome of the pandemic and the strength of the economic recovery are driving many predictions on future pricing.

Multiplicity of Fleet Tire Sizes

A perennial factor exerting upward pressure on replacement tire costs is the adoption of larger diameter tires and unique tire sizes. The increase in OEM automobile wheel diameters has driven up the price of fleet replacement tires, primarily because the larger the tire, the greater the manufacturing expense.

Tire Costs Flat but Expect Higher Prices in 2021

Reduced tire demand and a decrease in overall miles driven have caused tire manufacturing volume to decline in 2020, creating a downstream ripple effect softening commodity prices for natural rubber, but this may change in 2021.

Replacement Tire Transaction Costs Up Slightly in CY-2019

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.

Forecasting Tire Price Trends in 2020

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.

Replacement Tire Prices Moderate to Rate of Inflation

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.

Replacement Tire Costs Increased 8% in 2018

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.

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