Corporate India’s struggle with rising commodity prices continue as after steel and cement, tyre manufacturers are all set to increase on the back of rising raw material costs. Tyre companies are likely to hike prices across all segments from two and three wheelers to commercial vehicles by an average 5 per cent within the next seven days. The hike is largely on account of rising costs of natural and synthetic rubber.

“Two main factors behind this price increase are rubber and crude (for synthetic rubber). Both are stabilised right now but have shown high volatility in the last 3-4 months. Overall our raw material costs have gone up by about 12-15 per cent but we have decided to pass on only half of that and will increase prices by 5 per cent this month,” said CEAT vice president sales and marketing Arnab Banerjee. “We may have to increase prices again even if raw material costs remain stable but that is a call we have deferred for now.”

While prices of natural and synthetic rubber have gone up by 5.5 and 17 per cent respectively in the last four months, prices of steel based materials like bead wire have seen a higher 40 per cent increase. The industry has blamed the government for not ensuring raw material availability and disincentivising export of rubber.

“The fiscal scenario is loaded against us, as today under the Bangkok Agreement tyres can be imported at 10-11 per cent while import duty for rubber is higher at 20 per cent,” said JK Tyres president Arun K Bajoria. “Disregarding the dometic industries’ needs rubber is being exported and no action is being taken.”

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