Despite price hikes from tire manufacturers, retail tire prices dropped in April — for the first time in seven months.

Nick Mitchell is a managing director and research analyst for Northcoast Research Holdings LLC. Each month he analyzes retail tire prices with the help of the Northcoast Research Tire Pricing Index, which is made up of retail prices for more than 10,000 consumer replacement tires.

In April, “the average price of a light vehicle tire in our sample fell 0.3% to $128.62, as price declines across 10 brands outweighed an increase on one brand that we monitor.”

The average price of the most popular passenger tires fell 0.2% to $124.15. The average price of the most popular light truck tires fell 0.5% to $158.53.

The price drops were nearly equal across the three tiers of products studied. Tires in the value tier dropped 0.2% to $116.38. (Value tires include Hankook, Dunlop and other import and private label brands.) Mid-tier tires (Continental, Cooper and Yokohama) fell 0.3% to $119.73. Premium tires (Michelin, BFGoodrich, Pirelli, Goodyear and Bridgestone) also fell 0.3% in April, to $141.30.

“This was the first time that the average price of the tires in our sample declined since September 2016. In fact, we had seen price hikes in five of the previous six months.

“We believe the change in trend reflects the channel’s steps to deal with higher-than-planned inventory levels following weak sell-out trends in the first quarter.

“Efforts include increased promotional activity downstream and upstream, with the latter concentrated in the Tier II and Tier III segments of the market. It is interesting to note that Goodyear was the sole brand to see prices move higher in April, as the manufacturer has been the only supplier to announce a second price increase.”

But a one-month slip in prices didn’t affect the overall trend. Year-over-year, tire prices are still up.

Light vehicle tires up 1.8%

Most popular passenger tires up 2%

Most popular light truck tires up 0.9%

Value tires up 2.1%

Mid-tier tires up 2.5%

Premium tires up 1.4%

“Notwithstanding the recent setback in pricing trends in April, we continue to believe that the pricing environment in North America remains generally consistent with our expectations," Mitchell says. "In fact, we remain encouraged by the fact that we have seen retail tire prices across the U.S. increase in five of the past six months. Dealers continue to indicate that they believe the recently announced, and largely implemented, price hikes from leading tire manufacturers will end up sticking.

“To this point, the dealers reported seeing increased volume-based promotional offers from many manufacturers in early April, largely among the Tier II and Tier III suppliers. Some dealers noted that they are funding their own price investments to move inventory. Higher-than-planned inventory levels downstream also increases the risk that manufacturers might be forced to delay the next round of price increases. Recall that Goodyear appears to be the only producer to announce a second price adjustment.

“The wholesalers and installers that we speak with continue to say they are receptive of the higher prices, as they believe they will be able to effectively pass through the higher product acquisition costs to the consumer without sacrificing their markup, which will result in higher gross profit dollars per tire."