With the raw material price increase and geopolitical issues, tyre major JK Tyre & Industries has said there could be a price increase on products this and upcoming fourth quarter in the replacement market.

“The raw material costs in the second quarter have decreased by nearly 5-5.5 per cent on a quarter-on-quarter (QoQ) basis, but as we go forward, we are expecting some raw material prices to increase by three-four per cent in the third quarter and this is very much linked to the crude oil prices, and there is so much of turbulence in terms of the geopolitical conditions which are going on. So that (price hike) also has some bearing with this crude oil,” Anshuman Singhania, Managing Director, JK Tyre & Industries, told businessline.

However, he added that there won’t be any price hike to the original equipment manufacturers (OEMs). Price adjustments will only be applied in the replacement market and when deemed necessary.

Low rubber output

According to experts, India’s natural rubber production will likely be five per cent lower this fiscal in view of deficient rainfall in Kerala, which accounts for over 90 per cent of the industrial commodity’s production.

“There has not been a much price hike in the selling price, but we have been able to increase some prices in the replacement markets and we will see an opportune time...we have to be competitive so we will see when and where we need to increase. In the current quarter also we have no plans as of now for any price increase,” he said.

Positive outlook

Talking about the market, he said the demand for passenger vehicle tyres have grown in the last one year and has contributed 25 per cent to its overall portfolio in the first half of this year against sub-20 per cent in the same period last year.

Going forward, he said JK Tyres is seeing good signs on export front, too, with its plant in Mexico (JK Tornel) and with the Mexican inflation continuing to show a downtrend.