Tyre manufacturers JK Tyre and Ceat Limited have increased tyre prices by 2-4 per cent from October 1, 2009. The two companies had to resort to a price hike because of increasing raw material costs. Natural rubber has grown costlier by 50 per cent over the past six months. Other raw materials such as synthetic rubber, carbon black and nylon cord too have become more expensive. JK Tyre has raised tyre prices of heavy commercial vehicles by 2 per cent, light vehicles by 3-4 per cent and other vehicles by 2-3 per cent. Ceat Limited, owned by the RPG group, has hiked two and three-wheeler tyre prices by 2-3 per cent and will soon do the same for heavy commercial vehicles. Another tyre company, Apollo tyres, is also assessing the situation.
Another reason for increasing tyre prices is that tyre production, which is a capital intensive activity, has failed to keep pace with the rise in automobile manufacturing, leading to a mismatch in demand and supply. Tyre prices were last hiked in October 2008.