09/05/2011: Could you predict the future for car tyres prices?

Does anyone really understand what is going on in the complicated world of car tyres prices? I ask this because of late there has been a spate of contradictory reports appearing in the press. Some of these are unsurprisingly devoted to the thought that car tyres prices are continuing their upward trend whilst others seem to be saying that because of reduced demand, car tyres prices are actually falling. The recent catastrophe in Japan and the continuing uncertainty surrounding the state of the manufacturing industry in that unfortunate country can only add to the problems.

One of the key drivers behind car tyres prices is of course the price of natural rubber. At the same time however, it’s worth remembering that many leading manufacturers are enthusiastically pursuing the development of alternative ingredients to counter this. Car tyres prices have been rising for some time now on the back of poor rubber harvests caused by bad weather and by increasing demand from amongst the emerging economies. Manufacturing problems will certainly exacerbate this situation as supply and demand problems continue to affect car tyres prices.

Yet whilst there has been an undeniable upward trend in car tyres prices, many industry commentators point out that over-supply by manufacturers in those same emerging markets; supported by well-attested claims of product dumping, are actually tending to drive car tyres prices down. It is certainly the case that the recession slowed down demand considerably and, in the case of Japan in particular, the recent disaster has created poor economic and market conditions that may well drive down car tyres prices -unless shortages drive car tyres prices up again that is.

Perhaps unsurprisingly, all this volatility in supply and demand has fed down to instability in car tyre prices at a wholesale and retail level, where businesses are understandably cautious about whether they should stock up now or put on a stock clearance sale. For the average motorist, this uncertainty is likely to continue for some time. One other factor that may well drive up car tyres prices in the short term at least is that the financial recovery is likely to push up new car sales which will affect both availability and supply with consequent further increases in car tyres prices.