Jean-Paul Mindermann

Watts Tyre Group chief executive Jean-Paul Mindermann is warning forklift OEM dealers that they must adapt to a "new paradigm" with the rising prices of tyres as the UK-headquartered company announces its own price rise.

Mindermann says as a result of the higher cost of rubber, the prices of Watts tyres will increase between 6% and 10%, depending on the country and currency they are sold in.

"At the end of Q3 2007, we announced that we would be reviewing prices on a quarterly basis due to the soaring price of natural rubber," he says.

According to Watts, rubber prices increased 12% in 2006 but rose by an astounding 35% over the last 12 months. The rise in rubber price is driven mainly by increased demand from the Indian and Chinese automotive sectors and the limited worldwide rubber production capacity.

"If rubber prices remain at these levels, further similar tyre price increases are to be expected in the second half of the year," Mindermann warns, adding that tyre manufacturers have cut costs and reduced their margins but can't continue to absorb the higher rubber prices.

In the new environment, the forklift industry may choose not to offer leases with fixed service and tyre costs, Mindermann says.

"OEM dealers must now accept that they face a new paradigm in equipment leasing and will have to work closely with the tyre producers to find a best value solution for customers."