BERLIN: Inflation-addled car owners could face further price pressures this year if tyre production cost increases are passed on.
After automotive company Continental's early 2023 earnings "fell short of expectations" the company revealed that "inflation-related price negotiations scheduled for the second quarter are still ongoing."
Continental, perhaps best known as a car tyre producer, put the disappointing earnings down to "currency effects and continuing costs for special freight" in its August earnings report.
The company warned it "continues to expect significantly higher costs for materials, wages and salaries as well as energy and logistics". It also fears the global tyre-replacement business would see its sales fall or stagnate (-2% to 0%), down on expectations (1% to 3%).
Cost increases across the industry could see drivers end up paying more for replacement tyres - and for new cars - should manufacturers opt to pass costs on.
Producers are still feeling the commodity price increases, including rubber, and the shipping costs spikes that started during the Covid lockdowns and were worsened by the Russian invasion of Ukraine. In turn, tyre prices have in places increased by up to a fifth, overtaking wider inflation.
Consumers have in the meantime been shelling out more at the pump, with petrol and diesel prices soaring after Russia, a major oil producer, invaded Ukraine. While prices have since fallen back, they remain above pre-invasion levels.
Prices for gas and electricity, which are key to the transition to electric cars, have also surged and remain above pre-Covid levels.
