Energy costs blamed for higher tire prices

Bridgestone-Firestone boosts retail prices 8%

By Tom Stundza -- Purchasing, 1/30/2008 8:40:00 AM

Higher oil prices have driven up the cost of making tires, forcing Nashville-based Bridgestone Firestone North American Tire LLC to raise tire prices as much as 8% beginning March 1, according to The Tennessean newspaper.

According to the tiremaker’s public relations department, the major cost component of synthetic rubber is petroleum. Higher oil prices contribute to the volatility of rubber prices since they affect the production costs of synthetic rubber. Atop that, tire making is energy intensive and the company also must pay for fuel to ship raw materials to its plants, then to ship the finished tires to warehouses and on to customers. The price increases will apply to tires sold to auto and truck manufacturers for use on new vehicles, as well as to retailers as aftermarket replacements.

Bridgestone is the largest supplier of original-equipment tires for the Cadillac, Lexus and BMW brands and also provides tires to Chrysler, Nissan and Toyota, among others. The company also provides tires to tractor maker John Deere and truck manufacturer Paccar.