No Increase in Tire Prices

EghtesadOnline: The Organization for Protection of Consumers and Producers has postponed a review of tire prices to the first month of the next fiscal year (starting March 21), according to the head of the Tire Industry Association.

News ID: ۷۸۷۷۳۵

20 February 2022

"After holding a joint meeting of tire manufacturers with the Minister of Industries, Mining and Trade and explaining the situation in the industry, OPCP opposed an increase in the price of radial tires this year," Hamid Reza Abdolmaleki was also quoted as saying by Donya-e-Khodro.

After the meeting of two organizations, Deputy Minister of Industries, Mining and Trade Abbas Tabesh set April 3 as the deadline for submitting tire manufacturers' documents for OPCP to review.

The decision follows a proposal by car tire companies in the eighth fiscal month (Oct. 23-Nov. 21) to raise the prices of light and heavy vehicle tires.

The proposal, which ultimately followed the organization’s approval of a 25% increase in the price of bias heavy-duty tires, opposed the rise in the price of passenger car tires.

According to Abdolmaleki, tire companies must submit their final purchase invoices before the end of the current Iranian year to the organization.

As a result, the case of increasing the prices of radial passenger car tires is closed in the current fiscal year (ending March 20).

Some experts suggest that tire production may be reduced by manufacturers in retaliation. And there has been talk of revoking the tire export permit of manufacturers, if the domestic market needs are not met.

For this reason, tire production is not expected to decline in the last month of the year, as manufacturers pursue the export of their surplus.

“The organization will determine the price increase after reviewing the documents of tire companies," the head of Tire Industry Association said.

"With this decision of the government, the price of car tires during the Norouz [Iranian New Year] holidays [starting March 21] will remain unchanged and the profit and loss records of tire manufacturers will be reviewed in the next fiscal year’s first month by the Organization for Protection of Consumers and Producers."

Surveys indicate a shortage of freight and bus radial tires and some passenger car tires during the holidays and the first quarter of the next fiscal year (March 21-June 21).

According to some reports, it is not possible to import light and heavy tires at competitive prices for all vehicles. Therefore, there might be a shortage of some specific tires, but all importers cannot have a competitive presence in the market.

Other reports show that the use of foreign currency by tire importers at the same rate allocated to tire manufacturers, while domestic producers complain of suffering losses, can pose a major challenge to national tire production.

This is because tire factories have not succeeded in obtaining the permission to increase prices of their products and are offering tires at a loss.

Tire Output Exceeds 170K Tons

Iranian firms manufactured 15.91 million tires of passenger, truck, commercial, agricultural, road construction and industrial vehicles weighing 172,109 tons in the current fiscal year’s first eight months (March 21-Nov. 21).

Compared with 16.43 million tires weighing 175,650 tons produced in the corresponding period of last year, this shows a 3% and 2% decline in terms of number and weight respectively.

A total of 99,297 tons of tires for passenger cars were produced in the period, which accounted for 57.7% of total production and a 5% fall in terms of number year-on-year, IRNA reported.

The output of pickup truck tires (bias and radial) stood at 18,294 tons, registering a 13% growth YOY.

The production of truck and bus tires hit 37,225 tons, registering a 3% growth YOY. However, the output of agricultural, road construction and industrial tires registered a decline during the period under review, as manufacturers produced 2,318 tons of light agricultural tires (down 24% YOY), 11,698 tons of heavy agricultural tires (down 2%) and 3,277 tons of road construction and industrial tires (down 21% year-on-year).

Problems related to transportation of goods from China, exchange rate fluctuations, power restrictions for industries, including tire producers, and the continuous increase in the price of domestic raw materials without the possibility of a proportional increase in tire prices are among the main reasons for the decline in tire production for the third month in a row.

Some experts in this field believe that market saturation of radial tires is another reason behind the decline in tire output.

According to the statistics, a total of 12,485 tons of motorcycle and bicycle tires were produced during the period, up 18% compared with last year’s corresponding period.

The output of tubes stood at 6,593 tons, unchanged year-on-year.