Several tire giants announced price increases in May

Recently, several tire giants have issued notices of price increases in May, with the highest increase even reaching 25%.

Goodyear price increase of 6%

Recently, Goodyear announced a notice of price increases for passenger car tires on May 1, with a price increase of 4% in the United States and 6% in Canada. This is the first time that Goodyear has issued a comprehensive price increase notice for the North American market since July 2022.   Goodyear said that this is to cope with rising costs. Starting in April 2025, the United States will issue high reciprocal tariffs to the world, including tariffs on Chinese products that have been upgraded to 245%. As a result, Chinese companies haven't panicked yet, but American manufacturers are in chaos first! Why? The import prices of steel and rubber are rising.

Since March 12, 2025, the United States has imposed a unified 25% tariff on steel products exported to the United States from all trading partners, including China, Mexico, and Canada. Although the purpose of the United States' high tariffs is to force companies to return manufacturing to the United States, whether it can be successfully returned is not to be discussed for the time being. The high cost of imported raw materials has paralyzed American manufacturers! Local American consumers just appealed against the increase in tire prices last year, and it is unknown what kind of storm this price increase will cause. In addition to the tire factories in the United States issuing price increase notices, tires imported into the United States also increased in price in May. Earlier, Sumitomo Rubber just issued a price increase notice, with the highest price increase of 25%.

Sumitomo Rubber's price increase of 25%, the tire market is paralyzed

Sumitomo Rubber North America immediately issued a price increase notice after the "reciprocal tariff" was introduced-from May 1, the price of passenger car and light truck tires in the US and Canadian markets will increase by 25%, and the price of commercial truck and motorcycle tires will increase by 10%! Since Sumitomo Rubber has decided to close its US factories and transfer the supply to the United States to factories in Thailand and other regions, it is difficult not to have doubts about such a price increase-related to the 36% tariff that Thailand is about to deliver.

According to statistics from some institutions, excluding the US factory, Sumitomo Rubber has 12 factories around the world, of which 7 factories in Indonesia, Thailand and Japan are likely to take on the function of exporting tires to the United States after the North American factory was shut down. The United States plans to charge tariffs of 32%, 36% and 24% on these three countries respectively.

Based on the average price in 2024, the price of a passenger tire exported from Sumitomo Rubber's factories in Indonesia, Thailand and Japan to the United States will rise to 510 yuan, 400 yuan and 720 yuan respectively; the price of a truck tire exported from the Thai factory and the Japanese factory to the United States will rise to 1,270 yuan (because Sumitomo Rubber's product supply is mainly concentrated in the primary market in the United States, the price is expected to rise to 1,500 yuan) and 2,000 yuan respectively. Therefore, a price increase of more than 20% for Sumitomo Rubber is also expected.

At present, tire companies with production capacity layout in the United States are generally affected by the cost of raw material imports, and it is expected that the price increase will be around 10% when announcing price increases in the future; tire companies without layout in the United States can refer to Sumitomo Rubber for the price increase of US products, which is likely to be around 20%! Under global equal tariffs, the US tire market has soared in advance! However, under high inflation, price increases may be difficult for the market to buy. In 2024, almost all the leading tire companies complained about one thing-high-quality-price ratio tires are grabbing more market share.

In 2024, Goodyear's annual sales fell by 3.9%, and the high-quality-price ratio tires squeezed more market share in the US market, which was one of the main factors affecting its sales decline. Although foreign-funded tire companies are implementing the profit margin protection strategy of "preferring to sacrifice sales rather than cut prices", the damage to profits caused by the decline in sales cannot be ignored. The price increase wave launched by the giants in May 2025 can be said to have added fuel to the anxious tire sales.

Chinese tire overseas market is about to win

In fact, from 2023 to 2024, it is precisely because of the "unrelenting" price strategy of foreign tire companies that Asia's high-quality and price-performance tires have a window period to expand their market share-under high inflation, more and more car owners choose to try relatively affordable Asian tires. In 2024, the number of Thai passenger car tires and truck and bus tires exported to the United States soared to 58 million, Vietnam soared to 24.38 million, and Cambodia soared to 13.88 million.

At the same time, China's tire overseas production capacity layout accounts for almost 54% of Thailand's total tire production capacity, 60% of Vietnam, and 100% of Cambodia's production capacity output. This also means that the high-quality and price-performance advantage allows Chinese tire companies to sell at least 40 million tires to the US market through Southeast Asian factories. Although the export price of Southeast Asian tires has collectively risen by 30% under the US reciprocal tariff, if the United States still decides to impose terrifying reciprocal tariffs on the world after 80 days, on the whole, Southeast Asian tires exported to the United States will continue to maintain a price advantage.

In fact, with the high tariffs, the average price of tires in Southeast Asia has only risen from about 900 yuan to about 1,300 yuan; the unit price of tire exports from Europe and the United States to the United States has directly soared from 2,500 yuan to more than 3,000 yuan - if Canada's tire exports are calculated according to the US equivalent tariff rate, this year's export unit price is close to 4,000 yuan.

The latest news shows that the United States seems to be interested in reducing tariffs on Chinese goods. It is reported that the United States also feels that the previous 145% tax rate is very exaggerated. If the final news is true, American dealers will once again "breathe a sigh of relief" - there are still high-quality and price-performance tires that the market needs to sell.

The fierce price war in the domestic market has begun

However, everything is still unknown at this stage. Many tire companies have begun to turn their attention back to the domestic market while waiting for news - tires that cannot be exported to the United States for the time being will first go to the domestic market to see sales. "Tires placed on the car are called tires, and tires placed in the warehouse are called inventory backlogs." According to the US import data in 2024, the annual import of Chinese truck tires will reach 24.86 million.

The current wait-and-see attitude of Chinese tire companies towards exports to the United States means that these export capacities will first be directed to the domestic market - in the next three months, the Chinese tire market may have millions more tires available. What happens when the tire supply is oversaturated? Yes, it is a price cut! A Shandong wholesaler hinted that Shandong's "one of the five little dragons of Dongying tires" has begun to cut prices for promotions.

In addition to Dongying tire companies, industry insiders said that some leading tire companies have already begun to cut prices to survive. In April 2025, it will take more than 42 days for all-steel tires to be purchased and sold; and the turnover days of semi-steel tires, which can be sold in 28 days in 2024, have been extended to 45 days. With sales difficult to increase and more supply, the domestic market is about to start a chaotic price war of "open price increase and hidden price reduction" again.