PETALING JAYA: Tyre prices in Malaysia may rise slightly as manufacturers grapple with rising petrochemical and fuel costs, industry players say.
Malaysian Retreaded Tyre Manufacturers Association (TRMAM) president Wong Jin How noted that the industry is facing clear upward pressure on production costs.
“From a retread tyre manufacturer’s perspective, there is a clear upward pressure on prices. Our key materials, synthetic rubber and carbon black, are petroleum-based and largely imported, meaning that increases in crude oil and petrochemical prices directly impact our cost structure,” he said.
Wong added that more than 50% of raw material costs are linked to crude oil derivatives, and recent supplier quotations indicate prices have risen by more than 20%.
In addition to higher costs, manufacturers are also facing tight supply and availability of materials.
“The impact is substantial and immediate. Any movement in crude oil prices directly translates into higher production costs.
“Additional petroleum-linked expenses such as solvents, plastics used in packaging, logistics and energy-intensive heating and curing processes have further added to cost pressures,” he added.
Given the current situation, Wong said price adjustments are likely in the near term.
“Price adjustments are likely within the next two to three weeks, depending on how long the raw material cost escalation and supply tightness persist,” he said.
He noted the commercial vehicle segment, including lorries, buses and logistics fleets, is expected to be the most affected due to their high usage and reliance on retread tyres.
Any increase in tyre costs will also influence the broader supply chain, as these vehicles play a key role in the movement of goods.
Despite efforts to manage expenses, Wong said there are limited options to mitigate the impact of rising costs fully.
“In the current environment, there are very limited options to mitigate cost increases fully, and some level of price adjustment is largely unavoidable.
“Supply uncertainties and market volatility have made it difficult for manufacturers to stabilise costs or build inventory,” he said.
Echoing similar sentiments, North Malaysia Tyre Association chairman Hoo Khun Khiang said tyre manufacturers in China and Thailand have already indicated price increases of about 4% to 5%, with local manufacturers expected to follow suit.
He emphasised that the prices of rubber and oil play a significant role in determining tyre costs.
“The price of rubber and oil will greatly affect the price of tyres because we need a lot of oil to manufacture tyres,” he said.
Hoo added that commercial and transport vehicles, including long-distance buses, are likely to feel the greatest impact due to their extensive daily mileage and frequent tyre replacements.
“While manufacturers are doing their best to manage operational costs as efficiently as possible, there are limited options to offset the rising expenses, and ultimately, consumers will have to make purchasing decisions based on their budget and needs,” he said.
From the retail perspective, JL Lin of Tyres Pro Marketing said manufacturers have already signalled impending price adjustments.
“We have received indications from manufacturers that a price increase is taking place soon,” he said.
Lin estimated that rising raw material costs, particularly for petrochemical-based components such as synthetic rubber, could lead to an overall tyre price increase of approximately 5% to 10%.
Despite these expectations, Lin said manufacturers are exercising caution in their pricing strategies.
“Under normal circumstances, the increase could have been higher. However, due to the current slowdown in the local economy, coupled with softer demand and intense market competition, manufacturers are taking a more cautious approach and are not raising prices too aggressively,” he said.
