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Fleets facing escalating tyre costs, I247 Group warns
Date: 25 July 2022 | Author: Sean Keywood
Fleet tyre costs are rising at an unprecedented rate, putting additional strain on SMR budgets which are already stretched, according to management provider I247 Group.
It said tyre costs were also likely to continue increasing, due to a rapidly changing fleet mix -including increased adoption of SUVs and EVs - and double-digit percentage cost increases from tyre manufacturers.
The company's director of tyres David Legg said: "The price escalation is substantial and we're seeing two principal reasons for this. We've seen manufacturer price increases due to cost rises across materials, logistics, labour and fuel. These increases are then coupled with a significant change in the fleet mix where we're seeing larger rim sizes and new, more expensive tyre technology to accommodate an increasing number of SUVs and electric vehicles."
According to I247 Group, like-for-like tyre fitting costs for an electric Volkswagen ID3 are 246% more expensive than for an equivalent ICE-engined Volkswagen Golf.
In addition, the popularity of SUVs with larger tyres is said to be adding further inflationary pressure, while the range of tyres needed to serve both ICE and EV fleets is impacting the ability of tyre suppliers to stock such a diverse range of sizes and specification, creating additional operational complexity and therefore reducing historic fleet discounts.
Fitter costs are also said to be rising in order to retain qualified staff in the face of an industry-wide shortfall.
In addition, upstream cost rises are also said to be having an impact, such as a rise in raw material prices due to rubber shortages, while transportation costs - from escalating container shipping charges to diesel at record levels - are also adding to the price pressures.
With tyre prices continuing to surge, I247 Group is advising fleet managers to review fleet maintenance budgets and policies and to proactively book ahead wherever possible.
Legg said: 'We need fleet managers and drivers to be aware of the cost hikes we're seeing. The challenges in both tyre and staff supply mean that it's critical to book your tyre changes in advance to ensure your requirements can be managed as efficiently as possible.
"At I247 Group we're watching the situation closely and advising our customers on cost-reducing actions and tyre policy changes."
