Indian Manufacturers Announce Price Increases
Indian tyre makers are putting up prices in response to the continued rise in the cost of natural rubber. Apollo Tyres is said to be increasing prices by between two and four per cent, although one online source states the Apollo prices will rise by up to seven per cent as early as May. During an interview, company vice chairman and managing director Neeraj Kanwar said further increases cannot be ruled out should the cost of rubber continue its upward course.
“There is no way I can absorb such huge jumps,” in rubber prices. How much of it can I pass on, how much canI absorb, that is the balance as a company we have to play,” said Kanwar. “As an industry, we cannot absorb such a huge increase in natural rubber prices, the main raw material. Several small and medium units are on the verge of closure and the condition of tyre makers is getting worse day by day.” Kanwar said Apollo also plans to alter its product mix and sell more higher-margin radial products in India.
Joining Apollo in announcing price hikes has been JK Tyre and industries. “We will increase prices across product categories by three to five per cent from May 1,” said company marketing director AS Mehta. “The three to five per cent hike will only partially offset it (the higher cost of natural rubber). We may have to undertake further rounds of price increases in the next month or two.”
Ceat Ltd also said its planned three to 3.5 per cent price increase would not cover growing costs. “This increase is not at all adequate but because of competitive pressures we cannot do more than this in one go,” managing director Paras K Chowdhary said. “Rubber prices are very high, it is causing a lot of problems to tyre industry and margins are under pressure.” MRF executive vice president Koshy Varghese also commented that price rises may be on their way, but did not provide specifics as to when and by how much.
This is the second time this year that India’s tyre manufacturers have increased prices in response to growing costs –prices rose by an average three to five per cent in January.