Rapid inflation has also driven up the price of tires and tire services. The price difference between premium European tires and the cheapest Chinese alternatives has grown.
Kalev Kaasik, executive manager of Firststop that sells and changes tires, said that tires have become 15-30 percent more expensive over the past year, while price advance has slowed. "It seems we're on par with what we saw late last year today," he said.
He gave more expensive raw material and fittings prices, as well as that of energy as the reason.
Tire merchant Rehvid24 head Marek Moorus said that prices have also come down in some segments. "Looking at European manufacturers, their prices are up by 10 percent compared to last year, courtesy of inflation, electricity etc. But if we turn to Chinese manufacturers, prices have remained largely the same there, while container transport prices have fallen so much that Chinese tires cost almost the same they did two or three years ago. The difference [in price] between Asian and European manufacturers has grown wide indeed," he said.
The mid-priced and cheaper tires by European manufacturers have become roughly 30 percent more expensive over the past two or three years, Moorus remarked. "The difference in price between high-quality and expensive tires and cheap alternatives has never been as big as today."
Generally speaking, the quality of Chinese tires has improved as their performance fell considerably short of European alternatives years ago. "Of course, European makers have slightly better technologies and capacity for testing, while the needs of the average consumer are nowhere near what the technical achievements of premium manufacturers make possible," Moorus suggested.
The tire seller said that the consumer has also picked up on the price difference and sales of more expensive tires have fallen considerably at Rehvid24. "Based on the example of an average 18-inch summer tire, a top manufacturer's product may cost €150, while a Chinese company will sell you the same size tire that will very likely go the same distance – albeit not as comfortably or quietly – for €50," he said. However, instead of the budget option, customers tend to switch from premium to mid-price tires.
Kalev Kaasik said that Firststop's customers haven't changed their habits much and tend to exhibit brand loyalty. "Those who used to buy expensive tires still do, and the same goes for people who opted for the mid-range," he said.
People who go for cheaper options usually do so when buying summer tires as safety comes first when choosing their winter alternatives.
Tire change service price advance plateaus
Pressure on salaries has also hiked tire change prices. "The price advance came to 10-15 percent at the end of last year," Kaasik said.
"Just as you could get a bag full of groceries for €50 only recently, while the sum now runs out after you've put your bread and sausage in the basket. Life has gotten so much more expensive in general that we had no choice," he said.
Moorus said that the price of tire change services has doubled over the last few years, while the price advance has now largely stopped.
"After years of very low service prices [in Estonia}, we have now rapidly caught up with the Nordic price level. It is very difficult to find people as it is hard work and seasonal in nature. There's work between April and May and then again in October-November. Figuratively speaking, there is work for four months, while you still have to pay people to sit around for eight months," Moorus said.
While people in Estonia can pay the same for changing their tires than those in Finland, customers in Finland tend to have two sets of rims, meaning they can swap out entire wheels, which is much faster and cheaper, Moorus remarked, adding that changing tires (taking the winter tire off the rim and putting the summer tire on the same rim) may end up just as expensive as buying a second set of wheels.
Estonians still put their faith in studded tires
People in Estonia still clearly prefer studded winter tires. Non-studded winter tires are mostly sold with new cars the drivers of which prefer a quieter ride and believe in their vehicles' modern safety systems.
Rehvid24 sold 80 percent studded and 20 percent non-studded tires this season. A lot of studded tires were manufactured in Russia, while companies are now pulling out of that market.
"Studded tires are really only used in Finland, Sweden, Estonia, Norway, Russia and Canada. There are parts of Sweden where studded tires can no longer be used in cities. Because Russia used to be a vast market, many manufacturers had plants there," Moorus said, adding that tire makers are reorganizing now. For example, Nokian is moving its tire operations to China. But these processes take time.
Losing the Russian market could make studded tires even more expensive. "Major manufacturers, like Bridgestone or Michelin, can make enough studded tires for the season in a day or two. At the same time, winter tires have to be tested and are very expensive products. I get the feeling that without the Russian market, many manufacturers could lose interest in making studded tires as the market is tiny, prices are heading up and it may not prove possible to remain competitive. I believe it will become a niche product sooner or later," Moorus offered.
The Rehvid24 manager added that people who mostly drive in the city and only occasionally venture out have little reason to choose studded tires. Because studded tires need to be changed by a certain date, using non-studded tires also does away with tire change anxiety. "However, there is enough snow, ice and fear in Estonia to send people buying life insurance in the form of studded tires," he said.
Moorus also said that the price of storing one's tires at the workshop, or so-called tire hotels, has also gone up in the wake of exploding demand.
"Workshops just don't have the space to store everyone's tires. And you cannot store them somewhere far away as the customer might want to change their tires tomorrow. They have to be nearby. We are storing 10,000 tires and are out of room," he said.
While the service used to run €20-25 per season for years, Moorus suggested that it is now closer to €50. "I believe this will not come down again. Rather, prices might grow further, with budget conscious customers opting out."
Editor: Marcus Turovski