Analysts from Deutsche Bank commented that Yokohama Rubber Corp.’s third quarter operating profit margin declined two percentage points year-on-year to 11.9% because "price hikes offset only 2.7 billion yen of the 7.8 billion yen of impact to profits from rising natural rubber and other raw materials prices."
They also observed that the company did not alter its guidance due to “uncertainty regarding trends in raw materials prices and foreign exchange rates.” Instead Yokohama, as Toyo subsequently did, announced plans to hike the price of its replacement tires in the domestic market.
Yokohama plans to hike the price of its passenger vehicle tires sold in Japan by an average of 7% from April 1. It had already announced plans to hike truck/bus tire prices in Japan from March 1.
This will be its first hike to passenger tire prices in the domestic market since September 2008. “We expect a maximum boost to profits of around ¥10 billion, but a key point will be whether the competition will follow its lead,” Deutsche Bank concluded. (Tyres & Accessories)