Retail

The average selling price of a popular passenger tire is $119.88

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Northcoast Research Holdings LLC says tire pricing went down in November. According to its Tire Pricing Index, the average price point of a light vehicle replacement tire decreased 0.4% sequentially to $124.81.

* The average price of the most popular passenger tires was down 0.4%, to $119.88.

* The average price of the most popular light truck tires fell 0.4% to $157.79.

"Furthermore, the average quarter-to-date price has decreased 3.2% compared to the average price that was recorded in 3Q14," says Nick Mitchell. senior vice president of research for Northcoast Research. "That said, it is worth noting that the quarter-to-date results were negatively impacted by a significant inventory shift, as one of the retailers that we monitor significantly increased its winter tire offering during October.

"On a bright note, if we exclude the impact of this change in merchandising strategy from the data, the price of the remaining basket of light vehicle tires is actually up 0.4% quarter to date."

Mitchell says the average price of a "value" tire decreased 0.5% on a sequential basis during November, while the cost of the average mid-tier tire fell 1.3%. In contrast, the average price for a premium tire increased 0.3%.

"Our research on the retail pricing environment implies that the downward price pressure on passenger and light truck tires remained sensible during November, with the remaining price realignments on certain brands and SKUs occurring in a very rational manner, and consistent with the price cuts happening upstream and the favorable environment for raw materials," he says.

"Despite the minor price readjustments during October, we continue to believe that pricing trends are stabilizing at the manufacturing level, especially across Tier One and Tier Two brands. As a result, we will monitor these trends closely in the coming months to see if the firmer environment across all of the categories continues."

The Northcoast Research Tire Pricing Index, which was launched in August 2012, is a proprietary data set comprised of retail prices. "Our survey of more than 10,000 consumer replacement tire SKUs suggests that the broader pricing environment softened somewhat during November as prices declined across 6 of the 11 brands that we monitor," says Mitchell.

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