Tire Industry Raises Prices Amid Soaring Raw Material Costs, Yet Profits Remain Under Pressure

Since May 2026, retail prices for tires have been broadly increased across the board. Prices for economy-tier products have risen by RMB 30–50 per tire, while mid-to-high-end products have seen hikes of RMB 100–200 per unit, representing an overall increase of approximately 5% to 10%. The price adjustments affect multiple brands, including Michelin, Goodyear, Bridgestone, Linglong, and Triangle. This round of price increases stems from over 80 tire manufacturers issuing price adjustment notices since April 2026, with announced hikes ranging from 2% to 10%. The primary drivers include rising costs of key raw materials—such as natural rubber, synthetic rubber, and carbon black—as well as heightened petrochemical feedstock expenses due to crude oil price volatility. Large-scale retail chains like Tuhu Car Care and certain e-commerce platforms have implemented strategies such as bulk direct procurement, advance inventory stocking, and inventory buffering, enabling them to minimize retail price adjustments or even maintain promotional pricing at original levels. In contrast, smaller independent retailers, constrained by limited bargaining power and inventory capacity, have more quickly passed cost pressures onto consumers. Although over 15 automakers have announced vehicle price increases or reduced discounts since early 2026, these adjustments have primarily been driven by battery technology upgrades, rising chip and memory costs, and changes in vehicle specifications. To date, fluctuations in tire costs have not significantly impacted final vehicle pricing. Industry insiders note that tires constitute a relatively small share of total vehicle material costs, and automakers typically mitigate short-term price volatility through pre-secured inventory agreements. Despite the recent retail price hikes, tire manufacturers continue to face squeezed profit margins. Goodyear estimates that raw material costs alone will add approximately USD 200 million in additional expenses in the second half of the year. Michelin has warned that if Middle East conflicts persist, related costs could exceed EUR 400 million. Domestically, Sentury Tire reported a year-over-year decline of more than 40% in attributable net profit for Q1 2026, with a significant increase in prepaid expenses attributed to efforts to lock in raw material costs. Some companies benefited in Q1 from previously procured low-cost inventory, but with comprehensive raw material price increases taking effect from April onward, cost pressures are expected to be more directly reflected in financial results for Q2 and the second half of the year. Industry experts believe that relying solely on scale expansion and price competition is no longer sustainable; companies must enhance their pricing power through technological innovation and brand building. Leading firms are responding by expanding their premium product portfolios, intensifying R&D investments, and broadening overseas production capacity.