New Delhi, April 12
APOLLO Tyres Ltd (ATL) has hiked product prices by 3-4 per cent with effect from April 1.
The latest increase has been effected on the company's entire product range which caters to the replacement market, according to Mr Neeraj Kanwar, Chief Operating Officer, ATL.
"We are also in negotiations with the various original equipment manufacturers for a price increase," Mr Kanwar told Business Line here.
The latest price increase came nearly a month after the company cut product prices (2-4.5 per cent) across different categories to pass on the benefits arising from the duty changes announced in the Union Budget.
The domestic tyre industry continued to face profit margin pressures on account of the strong international crude oil prices and general robustness in the prices of natural rubber.
Mr Kanwar also made it clear that the latest price hike had nothing to do with the implementation of value-added tax. "We are still studying the impact of VAT in various states," he said.
The ATL official declined to comment on either the sales achieved or the profit earned in the just concluded financial year for the company (March 31). "All that I can say is that we want to have double-digit growth in our topline in the coming fiscal," he said, when asked to comment on the business plan for fiscal 2005-06.
Mr Kanwar also held that March 2005 had been a good month for the company. "We are now in minimal stock levels," he said.
There had been some frenzied buying of tyres by large consumers in March to save on the price differential arising from VAT implementation. In certain VAT jurisdictions, including Delhi, the VAT rate on tyres has been pegged at 12.5 per cent as against the hitherto existing sales tax rate of 8 per cent.
Meanwhile, ATL is aspiring to grow the market share of its Acelere range of tubeless passenger car radials to 20 per cent of the replacement market for tubeless passenger car radials by the end of the current fiscal. The company launched the Acelere range of tubeless car radials in October 2004. ATL may also soon get approval for original equipment (OE) fitment of Acelere tyres in the new Maruti Esteem model, company officials said.