THE CAR AND TRUCK FLEET AND LEASING MANAGEMENT MAGAZINE
Toyo Tire U.S.A. will increase the price of almost all of its commercial tires on May 1 with just one exception.
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.
Bridgestone Americas Tire Operations LLC and Bridgestone Canada Inc. will increase the price of Firestone brand truck and bus radial tires on Feb. 1, 2019.
Michelin North America Inc. will increase prices on its commercial tires on Dec. 1 by as much as 8%.
Higher commodity prices are putting upward pressure on fleet prices for replacement tires. National accounts are no longer as willing to absorb the majority of price increases, which are between 3%-8% on select tire lines.
A fleet cost reduction program goes straight to the corporate bottom line. If a company operates at a 10% annual net profit margin, reducing annual fleet expenses by $100,000 is the equivalent of generating $1 million in sales. Although fleet managers manage hundreds of thousands to tens of millions of dollars in corporate assets, only half are incentivized to achieve targeted performance goals. I advocate incentivization should be a universal best practice extended to all fleet managers.
For the past four years, tire costs have been stable. But, new cost pressures have emerged in 2017, due to higher prices for the commodities used to manufacture tires and the trend to larger diameter, more expensive tires.
For the past four years, tire costs have been stable. But new cost pressures have emerged in 2017, primarily with higher prices for commodities used to manufacture tires and the trend to larger diameter, more expensive, tires.
Passenger car tire prices are anticipated to increase in CY-2017. The key factors influencing future replacement tire prices are the cost of materials and the continuing trend to larger diameter and unique tire sizes.
As a wear item, tires are a depreciating asset. Your job, as the fleet manager, is to slow the rate of depreciation. Replacement tires as a cost category are a fleet’s second-largest operating expense, exceeded only by fuel. By maximizing tire tread life, you lower per-mile costs, resulting in fewer premature removals and optimizing the condition of tire casings, allowing for multiple retreads.