Tyre industry under CCI scanner

Tyre industry under CCI scanner
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First Published: Sun, Jul 13 2008. 01 20 PM IST
Updated: Sun, Jul 13 2008. 01 20 PM IST
PTI
New Delhi: The tyre industry may come under scanner of the Competition Commission of India (CCI) as a study commissioned by it, has hinted at price fixing arrangements within the industry.
“There seem to be some anti-competitive practices happening in the tyre industry. There could be cartels,” CCI Director General Amitabh Kumar told PTI.
The study commissioned by the Competition Commission of India (CCI) to Jawaharlal Nehru University said,“There is decrease in competition in the tyre industry... companies with similar sales realisation appear to have widely differing profit rates. This may indicate price fixing arrangements”.
According to 2005 data, around 80% of the market share was held by major players MRF (25%), Apollo (22%), JK Industries (19%) and Ceat (15%).
Tyre prices have been increasing for over a year now and last week major tyre makers, including JK Tyre and Industries, Apollo Tyres, raised the prices of truck tyres by around 6%. Another major manufacturer Ceat Ltd is also mulling a price hike.
The price hike by the manufacturers has, however, not found the support of dealers, who said it was unreasonable.
“In the last nine months tyres are dearer by 11.5% to 16.25%, while the Budget for the year had reduced the peak excise duty on tyres from 16% to 14%,” All India Tyre Dealers’ Federation had said in a statement.
The market for tyre industry in India, which consists of multinational players, public and private players, is primarily ruled by the demand for passenger car tyres having 20.6% of the share.
Whereas, in the sharp contrast to India, across the world, car tyres have the major share of around 88% followed by truck tyres.
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First Published: Sun, Jul 13 2008. 01 20 PM IST