There are several reasons why tyre prices in India are rising rapidly. Firstly, the cost of raw materials has increased significantly in recent years, due to factors such as inflation and the falling value of the rupee. This has led to an increase in the cost of production for tyre manufacturers. Secondly, the demand for tyres in India has grown rapidly in recent years, as the economy has boomed and the middle class has expanded. This has led to a shortage of tyres, and manufacturers have been forced to raise prices in order to meet demand. Finally, the government has imposed a number of taxes on tyres, which has also contributed to the rise in prices.
Natural rubber (NR) prices increased by roughly 20% year on year in fiscal 2022, while crude-based ingredient prices such as carbon black and nylon tyre cord increased by 40-50%. These constitute about 70% of the raw materials required in the manufacture of tyres.
Additionally, the Ukraine war also posed challenges to the global tyre industry regarding increased fuel prices and raw materials. This will, in turn, impact the supply chain in the coming months. Another factor that has affected the net profits in Q4 is the consequences of the semiconductor shortage in the automotive industry, which, in turn, has impacted the tyre industry by which it resulted in hike in Tyre prices
How tyre Prices in India have increased in the last 2 months?
In the past two months, prices for tyres in India have increased significantly. This is due to a variety of factors, including the rising cost of raw materials, the increasing demand for tyres globally, and the recent devaluation of the Indian rupee. As a result of these factors, many tyre manufacturers have raised their prices, and retailers have passed on these increases to consumers. This has led to a significant increase in the average price of tyres in India, and has caused many consumers to reconsider their purchase decisions.
What are the possible reasons behind the increase in tyre price?
There are several possible reasons for the increase in tyre prices. One possibility is that the cost of raw materials has gone up. Another possibility is that demand for tyres has increased, leading to higher prices. It is also possible that the price of oil has increased, as this is a major input in the production of tyres. Whatever the reasons, it is clear that the price of tyres has risen in recent years.
Impact of increase in tyre price on Indian rubber industry
The impact of an increase in tyre prices on the Indian rubber industry is significant. With tyres being a key input in the production of vehicles, an increase in prices would lead to a rise in the cost of production for manufacturers. This would in turn lead to higher prices for vehicles, which would impact demand and put pressure on the industry. In addition, the Indian rubber industry is also export-oriented, and an increase in tyre prices would make Indian products less competitive in the international market. This would further impact the industry and lead to job losses and a decline in production.