Federal, Nexen hike tire prices

May 10, 2005

Federal Tire Corp. is in the midst of increasing prices on its tires by up to 5%. Some of the price increases took effect April 1, 2005.

The company cites raw material price increases, rising energy and fuel costs and higher transportation costs as the reasons for the increases. The appreciation of the NT dollar by 3.5% against the United States dollar since Q3 2004 also has been a factor.

"The present price increase does not fully absorb and reflect Federal's increase in costs, and based on Q2 raw material prices, we will decide if there will be any further increases in Q3," said a company spokesman.

In addition, Nexen Tire America Inc. has announced that it will increase its Nexen, associate and private brand tire prices up to 7% on July 1.

Federal and Nexen join the list of tire manufacturers who recently have announced price increases.

* Continental Tire North America Inc. will raise Continental, General and private brand passenger and light truck tire prices up to 6% on July 1.

* Hankook Tire America Corp. and Toyo Tire (U.S.A.) Corp. also are hiking prices on July 1. Prices on Hankook's full line of passenger, high performance, light truck and medium truck tires will jump up to 6%. Toyo will raise prices in all product categories up to 8%.

* Michelin North America Inc. will hike its passenger and light truck tire prices sometime in July.

* Goodyear Tire & Rubber Co. and Pirelli Tire North America Inc. (up to 5%), Yokohama Tire Corp. (up to 7%), and Kumho Tire U.S.A. Inc. and Bridgestone Firestone North American Tire LLC (up to 8%) will increase their consumer tire prices on June 1.