Indian Manufacturers Deflate Tyre Prices

In India tyre prices are “tumbling” in response to the government’s decision to cut excise tax by eight per cent, local news sources have reported. According to India’s Economic Times, MRF and Ceat have announced 4 – 6 per cent price cuts, while others such as Apollo, Goodyear and Birla Tyres are likely to follow the same lead. This means that typical non-radial bus and truck tyres are 1000 rupees cheaper

Thanks to the downward price revision, a typical non-radial bus and truck tyre has dropped by 1,000 rupees (£12) a pair, while the price of tyres for light trucks is down 500 rupees (£6) a pair. The prices of imported tyres are also expected to fall by 3 – 4 per cent as they now attract only 15 per cent customs duty compared to the earlier 20 per cent. At the same time A, B and C segment passenger cars have become 50-100 rupees (£0.60 – £1.20) cheaper per tyre.

The price cut announcements follow earlier confusion over whether tyre makers would pass the excise benefits on to consumers. The cut in excise duty on tyres and a 5 per cent reduction in peak duty on imported tyres used by manufacturers has reduced tax outgoings by 7 per cent, the newspaper reported. However, some manufacturers are complaining of “wafer-thin” margins and say they may absorb a part of the duty relief. Meanwhile, Apollo said that it is working on the Budget implications.

“We are putting together the details to enable us to take a decision at the earliest, keeping in view all the implications of the Budget,” said Apollo COO, Neeraj Kanwar.