New Delhi: JK Tyre & Industries Ltd on Thursday said it is considering to hike product prices in April to offset rising raw material costs.
“The raw material prices are incredibly high and there is no way that we can keep absorbing it. At the moment, we are keeping a watch on the market and we may also increase tyre prices in April,” JK Tyre & Industries Ltd marketing head A S Mehta told PTI.
The company’s statement comes a day after Apollo Tyres announced that it would hike product prices by up to 6% from April.
Mehta said overall raw material cost increased nearly 50% in 2010-11 as compared with 2009-10, while the tyre prices increased by only about 18-20%.
“Already the margins of tyre companies are under so much of strain. In fact they have ‘evaporated´. Unless the prices are hiked, it is going to be extremely difficult for the companies,” he said.
Due to the highly complex and competitive nature of the market it is, however, difficult for a firm to simply increase prices without factoring what rivals were doing, he added.
Last month JK Tyre had hiked tyre prices by 2% but had to roll it back for commercial vehicles within 15 days as its competitors didn’t follow suit.
“This time around I will be keeping a close watch on how much hike my rivals are increasing and accordingly decide on our future course of action,” Mehta said
On Wednesday Apollo Tyres said from the first quarter of the next fiscal, prices of its bias commercial vehicle tyres will go up by 3% while that of truck and bus radial tyres will be dearer by 6%. Passenger car tyres will also go up by 3%.
The prices of the company’s passenger vehicle tyres vary between Rs 2,150 and Rs 12,500 per unit. The radial tyres of truck and bus are available for Rs 16,900-Rs 20,200