Hike in Indian tyre prices in the offing

KOCHI (Commodity Online) : With the rubber prices climbing in domestic and international markets, the tyre companies are contemplating a price rise.

Analysts say that a hike in the range of 3-5% is being expected.

"Of course, we are under pressure due to rising prices of rubber in the domestic market. We are monitoring the raw material prices and if rubber prices go up then it will push tyre prices too," RK Agarwal, head of marketing, Modi Tyres, told Moneylife.

Ceat, Bridgestone and Apollo Tyres had hiked prices 1%-2% in December.

Rubber prices reached Rs. 216 a kg in the Kottayam and Kochi markets in Kerala on Tuesday. Kerala is the biggest producer of rubber in India.

A slump in the output of major rubber producing States internationally has increased the prices at least by 25% in the past three months.

A steep increase in tyre prices in the order of 8-10% is however ruled out, though only such a measure would actually save the industry from a shrink in profits. Chinese competition is the deterrent here, analysts contend.

In the April-December period in 2010, tyre companies had hiked prices by 12%.