The automobile tire industry is quietly changing. Since 2026, an abnormal phenomenon has appeared in the tire market: tire production factories have successively raised ex-factory prices, but the retail price has not changed much.
It is not difficult for experienced drivers who often go to auto repair shops to change tires to find that major tire manufacturers have successively issued price adjustment notices in recent times, and many mainstream brands have increased their ex-factory supply prices in batches.
This is mainly because tire production costs are mainly concentrated on raw materials such as rubber, carbon black, and steel wire. The prices of such commodities fluctuate frequently due to international market conditions and supply and demand inventories.
Recently, the cost of purchasing raw materials has continued to rise. Coupled with the year-by-year increase in factory labor, energy, and logistics expenses, the hard costs of tire production have continued to rise.
Small and medium-sized tire processing plants are under the most obvious pressure on production costs. Rising raw material prices have compressed the already meager ex-factory profits. In order to ensure basic revenue, many factories can only increase the ex-factory prices to upstream dealers. First-line big-name tire companies have also followed up with price increases in batches. Price increases on the entire production side have become a common trend.
In addition to raw material factors, environmental protection control and production equipment upgrades are also increasing fixed investment by manufacturers.
The renovation of old production lines and the update of sewage equipment require additional investment, which further increases the production cost of each tire. It is a routine operation for manufacturers to increase ex-factory prices to cope with rising costs.
According to common sense, after the factory raises prices, intermediate dealers and offline auto repair stores will simultaneously raise retail prices, and ultimately the cost will be passed on to consumers. However, the current market situation completely deviates from this rule. The selling prices of terminal tires have basically remained stable, and some unpopular tires have even experienced price cuts and increased sales.
Terminal selling prices are stable, mainly due to four major factors that have withstood the pressure of price increases.
First, dealers have sufficient inventory and use low-priced supply in the past to hedge against price increases.
When the tire market fell in the past two years, many large regional tire dealers took note of the market situation and stocked up large quantities of goods at low prices, storing a considerable amount of spot tires of various brands.
Now that factory ex-factory prices are rising, dealers still have a large amount of inventory that was purchased at low prices in the past, and they do not need to price their past inventory at the new high cost.
In order to quickly digest inventory and withdraw funds, dealers will not immediately increase supply prices. Instead, they will maintain the original supply prices to auto repair stores. The cost of obtaining goods at stores has not changed, so there is no need to increase the price for car owners to replace tires.
When the previous low-priced inventory is exhausted and the cost of new sources of goods increases, retail prices will slowly adjust slightly.
Second, the competition among offline stores is fierce, relying on small profits but quick turnover to retain customers.
Nowadays, auto repair shops and tire specialty stores are everywhere in the streets. There are often several stores that can replace tires on a street, and competition among peers is extremely fierce.
Tire replacement is a store attraction item. Most repair shops do not rely on a single tire to earn a high price difference. Instead, they use affordable tires to attract car owners to the store. They also provide dynamic balancing, four-wheel alignment, tire repair, regular vehicle maintenance and other ancillary projects, and rely on additional services to make up for the profits.
If the price of tires is raised rashly, it will easily push car owners to the store next door. Therefore, even if the purchase cost rises slightly, the store will reduce its tire profits to maintain its customer base.
The third is the diversion of online e-commerce channels, forcing offline physical stores to control prices.
In recent years, major e-commerce platform tire flagship stores and local auto parts group buying have developed rapidly. Car owners can compare prices online and place orders without leaving home, and make appointments for free installation at offline stores.
Online brand direct sales do not have multi-layered middlemen to increase prices, so pricing transparency is very high, and prices remain stable all year round.
If offline physical stores want to retain customers, their pricing cannot be much higher than the online quotation. Low online prices continue to constrain offline retail prices. Even if manufacturers increase prices, physical stores dare not raise prices at will and can only absorb part of the cost increase independently.
Fourth is the price reduction momentum of small and medium-sized no-name tires, which constrains the overall market price.
In addition to the well-known first-line tire brands on the market, there are also a large number of regional small and medium-sized tire factories. In an environment where large manufacturers are increasing prices, in order to seize market share, small factories have chosen to lower profits and ship goods at lower prices, relying on their low-price advantage to seize the low-end replacement tire market.
The low-price distribution of low-priced tires by other brands further reduces the price adjustment space of mainstream brands. The entire tire retail market is constrained by low-priced supply, making it difficult to achieve a unified price increase for all categories.
The two-way squeeze of factory price increases and terminal price reductions, the first to be unable to withstand are small tire processing plants with backward production processes and no stable customer sources.
After the price increase of raw materials, production costs have increased. Products have no brand premium, so they can only rely on low prices to seize the market. Profit margins have been infinitely compressed. Some small and weak factories have successively reduced production, stopped production, and slowly exited the market.
High-quality leading tire companies rely on large-scale production and stable supply chains to dilute production costs. Coupled with high brand recognition and a complete dealer system, they have steadily increased their market share amid industry adjustments.
After a round of reshuffle, low-quality no-name tires have slowly faded out of the market. The overall quality of tire products circulating on the market has steadily improved. When car owners choose tires, the probability of stepping on low-quality tires has dropped significantly.
For ordinary car owners, the industry reshuffle period is a suitable window period for tire replacement. The retail price has not increased sharply with the ex-factory price, and product quality is still being optimized. If you choose properly, you can replace tires cost-effectively.
At the same time, car owners can also do good tire maintenance in daily use to extend their service life and reduce the cost of frequent tire replacement.
For example, check tire pressure regularly, and the most standard pressure measurement is when the car is cold; avoid frequently running over curbs and big potholes; perform four-wheel alignment on time to prevent eccentric wear; regularly change tire positions, etc.
When purchasing tires, you should distinguish between stock tires and carefully choose tires that have been out of the factory for more than three years; do not blindly pursue high-end brands, match the usage scenarios as needed; make rational choices for tire replacement bundled items.
Tire factories have collectively increased prices but terminal retail prices have remained flat. This is the result of multiple factors such as inventory, market competition, and channel changes. In the short term, car owners do not need to worry about the surge in tire replacement costs. In the medium and long term, as old inventory is consumed, the prices of some scarce specifications of tires may be slightly adjusted.
The industry reshuffle eliminates low-quality small factories, and the overall tire quality is steadily upgraded, which has more advantages than disadvantages for the majority of car owners.
Performing basic tire maintenance on a daily basis and properly selecting tires suitable for the car model can not only extend the service life of the original vehicle tires, but also accurately avoid pitfalls when replacing tires, and save vehicle costs through careful budgeting.
