Tyre prices have risen across India as manufacturers deal with an increase in input prices and a weaker rupee, according to BloombergQuint's survey of dealers across 6 cities.
MRF, Ceat Ltd., Apollo Tyres Ltd. and JK Tyre Industries Ltd. have all raised prices in the range of 2.5-3 percent.
Brent crude hit $75 per barrel mark last month, its highest level since November 2014. Oil and its linked derivatives such as carbon black form an integral part of a tyre company's raw material basket. In addition, a weaker rupee means imports become more expensive.
The increase in tyre prices comes at a time when both natural and synthetic rubber prices have remained largely stable at lower levels. MRF has increased the prices of tyres used by commercial vehicles by Rs 300-500 per tyre, effective May 5, according to one dealers surveyed by BloombergQuint.
MRF Ltd., India's largest tyre maker by market value, highlighted the risk of rising commodity costs in a press release accompanying its earnings for the quarter ended March.
Escalation in the cost of crude based inputs remains a concern and will add pressure to the bottom-line. At the same time the competitive intensity in the industry continues to remain at fever-pitch due to anticipated ‘on—streaming' of several Greenfield and Brownfield capacities by many players in the months ahead.MRF Press Release
With auto sales in top gear and a shortage of carbon black in the domestic market, dealers suggest there may be room for further price hikes in the second quarter of this financial year.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
