Effective March 1, 2011, Falken Tire Corp. (FTC) will raise prices on its Falken and Ohtsu brand tires anywhere from 5% to 8% depending on size. In addition, there will be in-line adjustments as needed.
In a letter to his dealers, President and COO Richard Smallwood explained that the company could no longer afford to absorb the cost of raw material increases.
"The economy, though slowly recovering, is still not as healthy and vigorous as we would like it to be, yet we find ourselves struggling with prospects of inflation in may key commodities," he wrote. "The tire industry in particular has been facing severe challenges in the unprecedented escalation of raw material costs, especially in the case of natural rubber.
"Though it is difficult, if not impossible, to predict how long this situation will occur, we do know that we will have to adjust to this new reality. As such, FTC has taken the necessary steps to reduce operating expenses and become a much leaner and more efficient organization. As a result of these efforts, FTC has been able to reduce operating expenses by over 25% versus the previous year.
"Despite these cost reduction efforts, we still find ourselves in the unfortunate circumstances of having to announce a price increase."
Falken last raised its passenger, light truck and truck tire prices up to 8% on Nov. 1.
