Tyre Prices on the Rise: Understanding the Trends

As the prices of **natural rubber** and other raw materials continue to soar, **tyre makers** are facing some tough decisions ahead. It looks like we might soon see an uptick in **tyre prices**. Many manufacturers are seriously considering price hikes across their product lines.

Recent Price Adjustments

In fact, many tyre makers have already implemented a price increase ranging from **2% to 5%** on select models. This trend is expected to continue as some categories also saw price adjustments in the first quarter of **FY25**.

Insights from Industry Leaders

“With raw material costs hitting record highs, particularly for **natural rubber**, we anticipate ongoing upward pressure on tyre prices,” shared **Harinder Singh**, MD and CEO of **Yokohama India**. He further explained, “We had anticipated this cost surge for this quarter and have adjusted our pricing strategy accordingly. As of now, we’ve implemented an increase of about **1% to 3%**. If raw material costs keep climbing, we will revisit our pricing strategy.”

The Rubber Market Landscape

According to the latest report from **Crisil**, the domestic average price of **natural rubber** reached **Rs 238 per kg** in August, marking a significant departure from the past decade. The global supply of natural rubber is feeling the strain, even as demand from the expanding **automobile industry** and other sectors remains robust.

**Pushan Sharma**, Director of Research at Crisil, highlighted the reasons behind this surge: “Unlike past spikes triggered by isolated incidents like farmer protests in **2016** or the pandemic-induced labor issues in **2020**, today’s price increase stems from core economic principles—supply and demand. Back in **2011**, the natural rubber market had enough supply to meet global needs, but between **2011** and **2023**, global production grew by **35%**, while demand increased by **40%**, creating a significant supply crunch.”

Challenges Beyond Raw Material Costs

Earlier reports from **Businessline** pointed out that tyre manufacturers are also grappling with rising freight costs, influenced by the **Red Sea crisis**. “The aftermath of the pandemic left the industry short on vital materials like **carbon black** and **natural rubber**, disrupting the supply-demand balance and driving up raw material costs, which in turn raises product prices,” said **Samir Gupta**, Managing Director of **Continental Tires India**.

He added, “Even as we work to recover from the pandemic, ongoing global instability continues to challenge our raw material supplies. This situation is likely to persist in the coming months. However, we’re pleased to report that all our plants are currently operating at full capacity and meeting demand.”