Yokohama expects truck tyre shortages, higher prices in 2011

ERJ staff report (R&PN)

Fullerton, California -- Commercial tyre dealers in North America can expect continued product shortages and more price increases throughout 2011, according to Yokohama Tire Corp. Senior Vice President Dan King.

“Unfortunately, we do not see (rising raw materials costs) letting up, especially through 2011,” King said in a question-and-answer interview prepared by Yokohama.

Like many of its competitors, Yokohama raised prices in January, but “it's not as high as what we're experiencing in cost increases,” King said, “so we can't pass on everything. We're willing to absorb that for right now, but we do believe raw materials will continue to escalate through 2011.”

As for supply, King said Yokohama experienced increases in demand that exceeded the industry's overall growth, making it difficult for the Fullerton-based tyre company to supply all customers satisfactorally.

King categorised the high demand as a “good problem,” but also one that's troubling because Yokohama “prides itself on having strong fill rates.”

To counter the fill-rate problem, Yokohama is counting on a higher allocation of production at plants in Japan and on expanding production at plants elsewhere in Asia. Yokohama Rubber Co. Ltd. has truck tyre capacity at plants in Mie, Japan, Bangkok, Thailand, and Suzhou, China, as well as at the GTY Tire Co. joint venture in Mount Vernon, Illinois.

From Rubber & Plastics News (A Crain publication)

Interview with Dan King on Yokohama website