Mumbai: Tyre manufacturers Bridgestone India, Apollo Tyres and Ceat are looking to raise prices. Over the last two quarters, rubber prices have risen 60-70% and are hovering at Rs 150 per kg. The tyre price increase will be the third in four months. Since January, tyre prices have gone up 8-10%.
Bridgestone India said it had increased prices by 3.5% (cost to the dealer) starting today. Hiromi Tanigawa, managing director, Bridgestone India Private Ltd, said:
“It will all depend upon the raw material prices. If there is an increase in the raw material prices, we will also increase our prices and pass on the burden further.” Apollo Tyres and Ceat plan an increase by May.
Rubber comprises 40% of the cost of a tyre. Any fluctuation in the commodity impacts the cost of production and margins of the makers, said a Mumbai-based analyst. “The makers have been of late increasing prices in tandem with the increase in the raw material prices,” she added. The makers have managed this on the back of strong demand in the market and supply-demand mismatch on the final product side.
“Tyre makers are operating at 100% capacity utilisation. Citing the hardening rubber prices, the margins of the tyre makers are expected to remain under pressure, but will smoothen up in the short-term,” said Vaishali Jajoo, an auto analyst with Angel Broking.
Auto makers like Mahindra & Mahindra (M&M) and Tata Motors, among others, have lately pointed out the mismatch in supply from component makers, specifically from tyre makers. Though they had hinted on the improving situation, there is still a long way before balance is maintained between supply and demand.
Bridgestone India said it had increased prices by 3.5% (cost to the dealer) starting today. Hiromi Tanigawa, managing director, Bridgestone India Private Ltd, said:
“It will all depend upon the raw material prices. If there is an increase in the raw material prices, we will also increase our prices and pass on the burden further.” Apollo Tyres and Ceat plan an increase by May.
Rubber comprises 40% of the cost of a tyre. Any fluctuation in the commodity impacts the cost of production and margins of the makers, said a Mumbai-based analyst. “The makers have been of late increasing prices in tandem with the increase in the raw material prices,” she added. The makers have managed this on the back of strong demand in the market and supply-demand mismatch on the final product side.
“Tyre makers are operating at 100% capacity utilisation. Citing the hardening rubber prices, the margins of the tyre makers are expected to remain under pressure, but will smoothen up in the short-term,” said Vaishali Jajoo, an auto analyst with Angel Broking.
Auto makers like Mahindra & Mahindra (M&M) and Tata Motors, among others, have lately pointed out the mismatch in supply from component makers, specifically from tyre makers. Though they had hinted on the improving situation, there is still a long way before balance is maintained between supply and demand.
(financialexpress.com)
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