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Investing.com -- Bridgestone revealed today plans to increase the prices of its tire shipments by 6-8% for the domestic replacement market.
The price hikes for summer tires are set to take effect from Jun 1, while winter tires will see an increase from Sep 1. This move is due to the challenges in offsetting the escalating raw material prices and logistics costs with productivity enhancements and cost cuts alone.
In a scenario where the annual domestic REP tire shipment value stands at ¥300bn, an average price increase of 7% would translate to just over ¥20bn. However, Morgan Stanley (NYSE:MS) estimates that the impact of these increases on the fiscal year ending Dec 2025 will be around ¥10bn, which is relatively small compared to the operating profit guidance of ¥505bn.
Bridgestone anticipates the effects of price hikes to be +¥59bn at the consolidated level in F12/25, with +¥28bn being attributed to raw material index-linked increases and +¥31bn resulting from REP price hikes.
For the year 2025, Sumitomo Rubber has already announced a maximum tire price increase of 8% for the Dunlop/Falken brands, effective from Apr 1. European companies have also indicated their intentions to raise prices for the Japan market.
Morgan Stanley suggests that this latest announcement from Japan’s leading tire maker could potentially trigger similar actions from other companies like Yokohama Rubber and Toyo Tire.
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