This past quarter has been relatively active in terms of pricing changes. But, many were very restrained and increases minimal. In our opinion, that will not continue to be the case.

The reasons include:

Increasing raw material costs – With increasing steel and other metals, the scrap market will likely grow stronger and will negatively impact core markets for reman products as scrap once again becomes more valuable than the part as core.

Continued growth within the salvage markets, especially for larger purchases such as engines and transmissions, ECMs.

According to some recent research completed internally at TLGR, there is a growing Internet presence within the business. While nothing currently replaces the local part store for immediate availability, as more is available electronically, especially in the salvage markets, it will constrain pricing as well.

Overall, we look to a much stronger increase in the third quarter pretty much across the board. And, it would appear there may be additional increases in the fourth quarter depending on the raw materials costs…which is typically a fairly quiet quarter.

Constraining increases somewhat may be a possible drop in economic activity which would also pressure sales.