Market and product
Continental to hike tyre prices starting in June
FRANKFURT, April 21 (Reuters) - Continental AG, the world's fourth largest tyremaker, is preparing to hike prices in Europe for its replacement tyres to compensate "at least partly" for rising costs for natural rubber and oil.
The company said on Wednesday it would raise the list prices on June 1 in Germany for summer tyres by 3 percent on average and for winter tyres by around 5 percent.
"We are currently preparing to implement this price increase across Europe," said Hartmut Woehler, head of sales and marketing for Continental's replacement car tyre business in Europe and Africa.
The company also supplies tyres directly to carmakers, called OE for "Original Equipment", but a tyremaker's real profits stem from the high margins made on its replacement sales.
Continental blamed costs that had doubled for natural rubber, which comprises 40 percent of the raw materials in a tyre. [ID:nSGE63K099]
It said oil prices rose 80 percent over last year's period, increasing by extension the costs for a petroleum by-product used in tyres called carbon black.
Continental said it expected raw material headwinds at its tyre business amounting to over 200 million euros ($268.8 million) this year if the price for natural rubber was more than $3 per kilogram.
(Source: Reuters.com, Reporting by Christiaan Hetzner)
