[THE INVESTOR] South Korea’s big three tire-makers have been reluctant to initiate big price cuts despite the recent tumble in costs of rubber and other raw materials, data showed Aug. 25.

The tire companies -- industry leader Hankook Tire, No. 2 Kumho Tire and Nexen Tire -- reduced their tire prices 0.9 percent to 2.5 percent in 2015 from the previous year, according to the companies’ 2015 business reports. Prices of their tires ranged from 50,000 won (US$44.60) to 70,000 won last year.

In contrast, the tire-makers saw their purchase prices of natural and synthetic rubber tumbling up to 20 percent and 17.5 percent each last year from 2014. 



Kumho Tire paid the highest amount, at 1.82 million won for a ton of natural rubber, while the largest purchase price of synthetic rubber stood at 2.32 million won.

Industry watchers said the three tire-makers are not active in reflecting falling materials costs in product prices because they dominate the domestic market with a combined 90 percent share.

“It is not so easy to reduce product prices as much as the falls in materials costs, because of wage increases, depreciation expenses and other costs,” said a Kumho official.

The Fair Trade Commission, the country‘s antitrust watchdog, started an investigation Monday into suspicions the companies have been trying to control prices of tires sold online.

(theinvestor@heraldcorp.com)