Groupe Michelin, in response to soaring oil prices, has introduced a new tire pricing system for its original equipment customers.
The system "will clearly distinguish the effects of petroleum-based raw materials from the intrinsic value of Michelin tires," according to the company.
Michelin says petroleum-based products account for close to 60% of the cost of a passenger and light truck tires. As a result, Michelin will adjust its prices based on a scale indexed to changes in oil prices.
Michelin says the system "is a pledge of transparency and clarity" in its relations with automobile manufacturers.
The price increase will take effect April 1, 2008, and will apply to all passenger car and light truck tires sold by Michelin to auto makers worldwide.