As rates of natural rubber is declining continuously resulting in much disturbance in the tyres business. Rate of the rubber that is a vital constituent in the fabrication of tyres was at its high point a few years back. During the end of 2010 and beginning of the year 2011, rates of raw rubber were at a record high of around $4.5 per kilogram causing augmented expansion and great demand.
2012 however, has witnessed a severe cost cut with rates declining around 3.1 per kilogram. This has resulted in rates of tyres being reviewed on 7 affairs resulting in actual fact to a collective price increase of around 15 to 20 per cent.
Tyre dealer’s confederation is necessitating that costs be decreased by around 18 to 20 per cent but Original Equipment Manufacturers are opposed to this price slash expressing their refusal to reduce costs because of several reasons.
Original Equipment Makers (OEMs) indicate that though raw materials rates are being contracted, other raw materials, which go into the fabrication of tyres such as synthetic rubber, rubber compounds and steel tyre string have all went through a price increase.
Synthetic runner and carbon black has in actual fact witnessed a 7 per cent to 10 per cent increase in values not to point out the devaluating worth of the Indian currency as compared to the US dollar that also puts pressure on tyre makers in their procurance of raw rubber from Thailand, a key manufacturer of crude rubber together with cost of fabrication, supply provision and growing costs of transportation.