The costs of two-wheeler as well as car tyres have increased by a maximum of 7% during the country’s festive season. This has occurred due to the sudden demand for vehicles during the festive season coupled with low supply of tyres. In the current scenario, vehicle owners will have to pay 5-7% or about Rs 150-200 in excess for a single tyre, while automobile companies will have to bear an extra price of Rs 800 for selling every new vehicle.
Less tyres, trouble for auto companies The shortage of tyres in the market has also resulted in the shrinkage of inventories or decrease in goods held in stock for makers of tyres. This has adversely impacted the production of cars and two wheelers, thereby affecting the retail growth in “To meet the increased demand for vehicle tyres, automakers are doing their best to increase manufacturing capacity at the plants and supply as much as possible during the festival time,” says Shyam Sunder, Proprietor of Shiva Industries ( Although automakers are keeping quiet about the actual impact on production due to shortage of tyres, analysts are estimating that there could be a decline in the output of vehicles by 5-10%. “In order to prevent such a situation in future, tyre companies should work in harmony with auto companies to maintain a balance in production,” says Subhash Patel, Proprietor of Bhumi Enterprises, a mid-sized manufacturer of industrial and automobile gears in Pune, Normalisation expected post Diwali Since the production of tyres has slowed down in the face of recessionary pressures, even increased sale of vehicles in the recent months has not been able to boost tyre production, thereby leading to low supply of tyres. After the festive season ends in October, when the demand for vehicles is likely to come down, it is expected that the production of tyres will witness an increase. Jacqueline Gomes |
