French tyre maker Michelin has announced that it will be increasing prices up to eight per cent by up across all segments. The price hike will be applicable in several markets including Africa, India and the Middle East region, the company said in a statement. The tyre price revision is a result of the increase in the raw material cost especially that of natural rubber, along with the global transportation cost and other market factors. The price hike will be brought into effect from March 2021 and extends to all Michelin Group brands.
The announcement does come at a time when automakers have been increasing the cost of their vehicles citing similar reasons. Michelin caters to all major segments, including passenger vehicles, two-wheelers and commercial vehicles in the country.
That being said, Michelin India has been operating in India with restricted tyre supply ever since the government limited tyre imports in the country in June 2020. More recently, the OEM announced that it did get a 'limited import licence' to import its passenger car tyres in the country, which curtails the number of tyres that can be imported. The restrictions were announced to boost the sale local tyre makers amidst the drop in demand due to the pandemic.
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With limited stocks, Michelin decided to limit its tyre sales to premium brand stores and service centres. A statement from the company read, "Michelin India has decided to prioritise selling of these limited stocks only through select partners such as Tyreplus, Michelin Tyre & Services, Michelin Tyre & Car Services, and Michelin Priority Partners."
Meanwhile, Michelin will continue to retail its two-wheeler and commercial vehicle tyres. The company has a facility in Chennai, while the two-wheeler tyres are produced at the TVS Srichakra plant in Madurai, Tamil Nadu. The company had invested about ₹ 3,500 crore in 2017 at the Chennai plant to double its production capacity for bus and truck tyres to 30,000 tonnes per year. The facility not only caters to domestic demand but also exports tyres to Europe.