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Tire companies tighten price screws

Munich. Despite slumping sales in the German market, leading tire manufacturers plan to raise their prices in response to higher fuel costs, an Automobilwoche survey has found.

Continental plans a price hike of between 3 percent and 8 percent yet in the fourth quarter. And despite an earlier increase, competitor Bridgestone is asking for more.

Fulda Chief Executive Bernd Joachim Hoffmann has announced plans to raise tire prices on Jan. 1. Pirelli sales chief Uberto Thun-Hohenstein plans to follow suit for summer tires in 2006.

Peter Huelzer, managing director of the German tire dealer and service group, characterized the effect of price increases as "not exactly something to stimulate sales" in an already battered market.

The sales projections of 44.7 million tires, compared to 44.3 million in 2004, can only be maintained if "the last quarter goes extraordinarily well," he said.

Sales to consumers this year have been "clearly worse than expected," Huelzer said. As of the end of August, summer-tire sales were 4 percent less than projected.

For the last quarter, retailer stockpiling is 8 percent above projections. But, Huelzer said, it is now impossible to say whether that quantity can be sold.

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