The constant depreciation in the value of rupee can probably lead to an increase in the tyre prices, because of surge in the cost of raw material. In the last two months, rupee witnessed a downfall of 15 per cent, which has pressurised the margins of tyre manufacturing companies. Vikram Malhotra, Vice President (Marketing and Sales), JK Tyre addressed the press after inaugurating their fifth steel wheels showroom in Kochi and quoted, “Since there is a slowdown in demand we have to see how much of the increase in cost can be passed on to the customers.”
In the process of tyre manufacturing, around 85 per cent of the raw material accounts for the cost of tyre and with the depreciation in value of rupee, the cost incurred in imports has increased. He further said that the tyre manufacturers are still bringing-in rubber to India, a main content in the raw material, as it is cheaper.
The Original Equipment (OE) market of tyres is currently moving at a slower pace, whereas the market of replacement tyres is steady. It is anticipated that the car sales will witness a boost in the second half of 2012, if the interest rates are reduced. In the present scenario, the tyre makers find exports more practicable. Malhotra further added, “We are looking at South America and Africa for exports in a in a big way.”
The mayhem witnessed by Europe’s economy did not affect its exports since the region does not buy big volumes. JK tyres presently operate 131 steel wheel outlets throughout the country, and the numbers will further expand to 200 by the end of 2013. The steel wheel outlets of the company also render services for total car solutions to their customers.
