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At a glance
Where is natural rubber produced?
Today more than 90 percent of the natural rubber supply comes from Southeast Asia. As rubber trees require a hot, damp climate, they grow only in the Rubber Belt, an equatorial zone that stretches around the world.
How much oil is required to produce a tire?
About seven gallons. Five gallons are used as feedstock (from which the substances that combine to form synthetic rubber are derived), while two gallons supply the energy necessary for the manufacturing process.
Source: Rubber Manufacturers Association
Inflating tire prices.

Jason Byerly, general manager of McMahon Tire, talks about rising tire prices.

Samuel Hoffman | The Journal Gazette
Travis Strock, left, and Quentin Walker remove tires from a minivan at McMahon Tire.

Consumers feel pinch of costly tires

Manufacturing costs, demand send prices up 30 percent in last 5 years

At McMahon Tire as elsewhere, prices are up.
Wood
Samuel Hoffman | The Journal Gazette
The median cost of a new set of tires is $450.

Richard Wood is a Fort Wayne liquor salesman who has to routinely fill the rear driver-side tire on his Toyota Tacoma pickup with air.

It’s not the most dignified of duties, but a slow leak causes a drag on the vehicle. And the 29-year-old can’t afford to leave the truck – or his customers – flat.

Wood says he dealt with this all winter.

“Probably a nail in it, I don’t know,” he said. Wood may get the tire patched, but if it’s beyond repair – as he suspects – he’ll have to buy a new one.

He’d rather avoid that cost.

“It’s probably 100 bucks and $400 or more for a full set of tires,” Wood said. “I don’t have the money for that. I have higher priorities like food and living expenses. You feel like you’re being taken advantage of, really.”

The U.S. retail tire industry raked in $37.8 billion in 2012, down about 3 percent from a year earlier, according to Modern Tire Dealer, a respected industry publication in Uniontown, Ohio, that tracks new tire sales.

Shipments reached a peak of 281.4 million in 2005, but haven’t come close since.

So, if Wood and others are expecting sympathy from retail tire stores, it’s doubtful they’ll get offered a hanky.

Lower prices for consumers aren’t likely. That’s because automakers are starting to sell more vehicles, which is beginning to boost demand for tires. And for cosmetic and other reasons, vehicle manufacturers are equipping cars and trucks with more costly tires.

Most of the demand keeping prices high is coming from automakers, not consumers replacing tires.

McMahon Tire general manager Jason Byerly said sometimes it’s hard convincing customers he’s not trying to rip them off and that there are market forces at work.

“They look at me like I got horns and a tail or something,” said Byerly, who runs the tire and service center at 4201 Coldwater Road. “Over the last five years, prices have increased 30 to 40 percent. The median price for a set of tires is $450 to $500, but it could easily be more depending on the size and make. For a lot of people, that’s crazy.”

The components that make up tires – most notably oil – aren’t cheap either, so motorists looking for pre-recession prices will be hard-pressed to find them.

Many consumers continue to grapple with unemployment and a tepid economy, and buying tires is an expense they put off as long as they can.

“At a certain point, it becomes unsafe because the tires get bald,” said Dan Zielinski, spokesman for the Rubber Manufacturers Association in Washington, D.C. “In a down economy, general auto maintenance gets deferred.”

Dent Johnson is plant manager at the BFGoodrich plant in Woodburn. The tire manufacturer invested $50 million at the facility in 2011. The company’s project included a 7,500-square-foot building, a 1,000-square-foot locker room, an electrical substation, replacement of an existing cooling tower and a new cooling tower. The company also created 35 jobs at the plant.

Johnson would not return calls seeking comment on production levels but did say that tire sales have essentially been unimpressive since 2009. In fact, today is the beginning of a one-week layoff at the tire plant. Last week, the company said “market softness” affected sales.

The furlough likely doesn’t surprise Fort Wayne tire salesman Dave Kosiarek.

“It’s tough out here,” said Kosiarek, who owns Tom Steele Tire, 4544 Illinois Road. “The average-size tire is getting bigger. Cars that used a 16-inch tire are now an 18 or bigger. That means cost goes up. We’ve always tried to specialize in selling used tires as well, but they’re getting harder to get.”

Johnson also said some “people aren’t driving the way they used to.” Since the recession, families have replaced long summer vacations with short excursions, he said.

Unemployment and gasoline prices will continue to be factors.

A gallon of unleaded fuel in Fort Wayne has been more than $3.50 for weeks. A notable late-year decline in the jobless rate saw it dip below 7 percent in 2012, but unemployment in January was 9.1 percent, up from a revised 8.2 percent in December.

“There is stagnation in the miles driven,” Johnson said. “People are not going to rush out and by tires anymore, unless they really need them.”

pwyche@jg.net

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