Are tyre prices likely to go up in the future?

Are tyre prices likely to go up in the future?

As a driver, the price of tyres may greatly influence your purchase habits. If you are on the market for a new car, you might choose to go with a smaller vehicle, in order to find smaller tyres, at a lower price. On the other hand, if you can find a vehicle that wears tyres down less, so you can change the less often, this may also have an impact on what you will purchase. One question that may have is: are tyre prices likely to go up in the future? Although the prices have steadily increased over the years, it is a possibility that they are going to stabilize, and that increases will come to a halt.

Rubber production –

Regardless of how you look at it, the price of rubber, is the biggest determining factor in the price you are going to pay for tyres; a major increase in the price of rubber in the past ten years or so, has contributed greatly to the price hikes you have noticed, each time you change your tyres. In fact, the price of rubber today, is more than double the price manufacturers paid in 2004; this without a doubt is going to hit the consumer in the end. So, if the price or rubber stabilizes, then additional increases in pricing are not going to continue.

Alternatives –

Manufacturers have also been looking at alternative material bases, or additional materials that can be used in the tyre production process. With many solid material options and with research that has been done, certain companies have found new methods to develop tyres. Although rubber is still the only type of rubber on the road, and will likely be for years to come, if somehow other raw materials can be used, then pricing might also stabilize, and possibly drop.

Over supply –

Although the supply and demand has been fairly stable over the years, in recent years, over supply of tyres has been a big issue for manufacturers; in fact, many of them are dumping tyres to third party sellers, and to lower priced retailers, due to the fact that they have so much supply, yet the consumer is not purchasing. Since manufacturers are continually developing new, safer tyres, and better quality tyres, the oversupply has to go somewhere else. As a consumer, this is a good thing; not only does it mean you can purchase certain tyres for less, it also means that manufacturers are going to have to slow down production, or continue to sell at a lower rate, just to get the tyres they currently have in stock, sold.

Driving conditions –

This is another factor that determines how often you change your tyres, and also how much supply is enough for tyre manufacturers. If drivers are changing their tyres less often, due to better, stable driving conditions on the road, and manufacturers are continually producing tyres at the same rate, this is going to result in more over supply; again, this bodes well for drivers who are hoping to see a price dip in the tyre prices they are going to buy. Improved driving conditions, and taking better care of our vehicles on the road, will help individuals save, but will also create a savings for more people on the road in the long run as well.

Market conditions –

Recessions, natural disasters, issues with production, or other problems with the economy, can also damper the tyre production market, as well as other markets in an economy. Although these are unexpected, if a natural disaster occurs, or if the economy greatly slows down, and fewer drivers are on the road, there is going to be much less demand. This is naturally going to result in a dip in the price of tyres. On the flip side, if issues with production occur, and there is much greater demand than the actual availability of tyres, the prices are going to rise. This is possibly the most unpredictable factor, and possibly the one thing that manufacturers and drivers can’t account for, when trying to determine if the price of tyres will rise or fall. The cost of rubber, production, supply and demand, and tyre conditions, are all things that can be calculated; but, certain increases, or last minute drops in the market, that are unforeseen, can have a much larger impact on the price that consumers will pay for tyres in the future.

Production methods –

Another factor that may change, is production methods for developing tyres; if new materials are discovered to help reduce production costs, or if new equipment is used to help speed up production, these are also factors that will have an impact on the price you can expect to pay for your tyres, in the future. The amount being produced, and the methods of production, as well as production costs, are some of the biggest indicators, as to what you are going to pay, as an end consumer, when purchasing tyres. If things stay the same, prices will likely increase; but, if new methods, easier methods, and cheaper production methods are found in coming years, you can also expect to see a dip in the price of the tyres that you are going to buy, in future years to come.

It is impossible to say exactly what is going to happen to the price of tyres you are going to buy in years to come. If things remain the way they are going now, with extremely high rubber costs, then of course you can expect to see increases in price, as has been the case in recent years. But, with different materials which have been experimented, new production methods, and other unforeseen issues and market conditions, it is not easy to determine what the future holds. These factors will play a role in pricing, but they are not the only determining factors that should be looked at, when trying to determine future prices, for the tyres you will purchase for the vehicles that you own and drive.

Kent James is an electrical engineer from Brisbane, Australia

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