By Alex Kapadia
Apollo tyres plan to raise tyre prices in the March quarter to maintain profit margins as raw material costs rise, according to a top official.
The Indian tyres manufacturer blamed the price hike on the increasing cost of natural rubber and crude oil and claimed it needed to raise prices to protect its margins.
Apollo already raised prices by 5% in January and by 3% in November, however Sunam Sarkar, the company’s chief financial officer, told Reuters: “There is every chance (of a price hike).
Mr Sarkar said that the benefit of low-cost inventory carried over from the September quarter offset some of the rise in input cost during the December quarter.
However, with raw materials accounting for 70 per cent of the tyre-making costs, Apollo cannot afford to shoulder the burden of rising prices without passing it on to customers.
Mr Sarkar said there is room for further increase in prices for the various tyres manufactured by the company, but declined to give more details.