Cooper to raise prices up to 5%, Armes reports
Roy Armes, chairman, CEO and president of the Cooper Tire & Rubber Co., says in its third quarter, the company was able to show improvement in its margins “even with the persistent challenges of high raw material costs and sluggish demand in key markets and product lines where we have significant exposure. Our sales growth resulted in the company's first quarter with over $1 billion of sales.”
During a press conference to discuss the company’s third quarter results, Armes says to counter the increased raw material costs, the company will raise its tire prices by up to 5% in the U.S. on Dec. 1. The increase is less than previously announced price hikes due to “consistently disciplined” prices in the market and some customer push-back on price increases.
Armes adds, "We have been receiving great feedback on recently launched products, with our highly popular Discoverer A/T3 tire earning a best buy rating from a leading consumer products magazine. This follows excellent reviews earlier in the year of our Cooper Zeon RS3-A ultra-high performance tire.
"Commercial truck tire sales continue to grow, driven by the success of the Roadmaster product line in North America. As we continue to strengthen our product portfolio, the company will grow in premium and other product lines, helping to balance our exposure to broadline tires. We continue to believe that pent-up demand for broadline tires exists, although it is difficult to predict exactly when that demand will manifest.
"Raw materials have shown signs of stabilizing, but these costs remain at elevated levels and are inherently volatile. We believe the company's raw material index will decline sequentially by less than 5% from the third quarter to the fourth quarter,” Armes says.
"Our manufacturing costs were higher during the quarter compared with the same period a year ago, primarily as a result of manufacturing at below optimum levels for cost absorption as we adjusted production downward to maintain appropriate inventory levels while producing a more premium product mix.
"While we are never pleased with an increase in manufacturing costs we have demonstrated in recent years an ability to reduce these costs while delivering high quality products. We continue to believe meaningful results will be yielded from our focus in this important area over the next couple of years,” Armes reports.
"To summarize, we continue to see progress and positive signs in many parts of our business. These include the excellent reaction to our products around the globe and the continued development of our manufacturing footprint. The success of our efforts to strengthen the business has positioned us to benefit in the future and improve shareholder returns."