Since April this year, the Indian rupee had been showing a perennial decline of almost 15 percent, affecting the margins of the tyre manufacturing firms in the country.
While speaking the inauguration of its fifth steel wheels outlet in Kochi, Vikram Malhotra, Vice President (Marketing and Sales), JK Tyre told the media: 'As there is a lull in the demand for tyres, we need to contemplate as to how much of the increase in cost could be passed on to our customers'.
The fact of the matter is that in the process of tyre making, a lion's share (almost 85 percent) of the raw material is accounted for the cost of tyre. What with the depreciation in value of rupee, the cost incurred in imports had trebled. 'What is more, Indian tyre manufacturers continue to import natural rubber to India, which is the main ingrediant in the raw material, as it is cheaper', Malhotra pointed out.
Stating that the OE market of tyres was currently moving at a snail's pace, the official added: 'Whereas the market of aftermarket tyres is steady. Therefore, it is hoped that the car sales would witness a boost in sometime during the second half of 2012, provided the interest rates are reduced. In the current scenario, the tyre producers find exports more pragmatic. We are looking at South America and Africa for exports in a in a big way", Malhotra added.
The economic slowdow happening in Eurozone had not affected the company's exports, as the European region imported lesser volumes of tyres from JK Tyre. The company presently operate 131 steel wheel outlets throughout the country, while this would be increased to 200 outlets by the end of next year. The steel wheel outlets of JK Tyre also offer services for total car solutions to its patrons.