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Pratim Ranjan Bose

Kolkata, May 17 After a gap of more than one year, tyre makers are expecting to secure a price revision from the heavy commercial vehicle manufacturers, including Tata Motors and Ashok Leyland, for the OE (original equipment) supplies.

Sources in the leading tyre makers said that negotiations with automakers were at an advanced stage and revised prices were expected to be effected in phases, beginning this month.

“We are currently negotiating with leading automakers for price revision for OE supplies,” Mr A.S. Mehta, Marketing Director of JK Tyre & Industries Ltd, told Business Line.

“The last such revision took place nearly 15 months back. We are hopeful of effecting price revision in some product ranges beginning this month,” he added.

Sources in Ceat Ltd also confirmed similar developments.

While Ashok Leyland was not available for comment, a Tata Motors spokesperson declined to comment on issues related to prices negotiations.

A company source, however, confirmed that tyres on an average constitute approximately 10 per cent of the cost of heavy commercial vehicles (HCV). Automakers generally distribute their total OE requirement to a number of tyre manufacturers.

Though price negotiations take place separately between the automaker and the OE supplier, the price revisions follow an industry-wide pattern.

OE supplies constitute approximately 20 per cent of HCV tyre sales by the domestic manufacturers. The overall HCV segment contributes roughly 65-70 per cent of the sales turnover of the Indian tyre industry.

Tata Motors and Ashok Leyland are the largest players among heavy commercial vehicle manufacturers, followed by Eicher, Man Force, Swaraj Mazda.

It may be mentioned that tyre prices were stable for OE supplies at a time when the replacement market witnessed repeated price increases.

In the first five months of this year, prices were increased on two occasions in the replacement market.

According to sources close to Automotive Tyre Manufacturers’ Association, tyre prices moved up by 7-10 per cent in the replacement market during the last one year, in the face of severe cost push — on account of spiralling raw material prices including natural rubber, synthetic rubber and chemicals.

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