Tyre manufactures may increase prices again due to the sharp rise in natural rubber (NR) prices. It will be the fourth increase in the current financial year. The quantum may vary from company to company but the range may be two-five per cent.
So far, in this financial year, prices of various types of tyres have gone up by 10-20 per cent on an average. The last increase was in December 2010, when prices were increased four-five per cent.
JK Tyres, a leading tyre manufacturer. has decided to increase prices by two-four per cent from next week. So far the company has increased prices three times this financial year.
A S Mehta, director (marketing) of the company told Business Standard the company would increase prices next week and monitor the market closely. “We cannot enhance prices by 10 per cent at one go, so we decided to go for a two-four per cent increase now, watch the market and then decide on a further increase,” he said.
Increase in prices of synthetic rubber and crude oil was a concern and therefore there was no alternative, he added. Also, the reduction in import duty would not have much effect on the industry as availability of NR was a major issue, he said.
Other leading manufacturers will also go for a rise in prices, not only in the original equipment segment but in replacement segment also. Rubber was at Rs 225 a kg today, an all-time high. According to Satish Sarma, chief, India operations, Apollo Tyres, “Prices will be increases in this quarter itself, but the quantum of increase is yet to be decided. It is very difficult to say anything about the quantum of increase right now since we have to take into consideration a lot of factors other than the increase of natural rubber prices. It is definite that prices will go up shortly.”
Apollo Tyres has increased prices three times in this financial year and the cumulative average increase has been 10 per cent, according to him.
Rajiv Budhraja, director general of the Automotive Tyre Manufacturers Association (Atma), said tyre companies were finding it difficult to cope with the daily increase in prices of rubber. As global prices are higher than the local ones, the reduced import duty is also not helping them. The availability of rubber in the global markets was a serious concern rather than appreciating prices, he said. Atma will approach the government and inform them about the grave situation.
