Rising raw material prices, skyrocketing transportation costs, double-digit energy price increase. If the automotive world is facing one of the most complicated periods due mainly to the lack of microchips, the tire industry is also facing a "perfect storm." Adding to the long list mentioned above, is a bleak economic scenario driving up inflation in recent months.
The key role of sustainability
How to respond to such a turbulent period? Obviously, there is no magic formula, but a series of actions aimed at limiting losses while outlining an efficient strategy for the future. On the manufacturers' side, the main target is to increase the use of recycled materials, thus reducing the demand for unsustainable raw materials. Some examples? Producing tires using in part materials from recycled components creates a virtuous manufacturing system characterized by increased attention to a circular economy. Without looking at each manufacturer, the common denominator is to increase the percentage of sustainable materials over the years, thus minimizing the environmental footprint of new tires. On the other hand, as far as sales are concerned, business strategies will have to be revised going beyond the search for maximum discounting.
A comment from Assogomma
"Skyrocketing prices and limited availability of raw materials have been a constant for more than a year and a half, aggravated by the Russia-Ukraine war and the subsequent restrictions adopted by the European Union and Russia," says Fabio Bertolotti, Director of Assogomma. "In fact, the rubber industry depends on strategic materials, such as carbon black - 37 percent of which comes from Russia - and synthetic rubbers to which we must add the ban on the import of metal reinforcements from Belarus. Alternatives are either missing or hard to find and in very distant countries involving transportation costs that are now out of control with the uncertainty of meeting delivery schedules. In the first 5 months of 2022, raw material prices have risen by several percentage points, and the cost of energy suffered a 3- to 5-fold increase over the previous year. Such widespread and significant rise in costs cannot be passed on downstream to the final customer except partially. Corporate turnovers are growing giving the wrong impression of prosperity in the sector, but a closer examination betrays heavy contractions in margins with depressive effects on investments and research. In the light of this rather depressing picture, if current conditions do not change rapidly and significantly, production stoppages due to lack of raw materials cannot be ruled out, and with them higher tire prices.
