Prices will rise by one per cent, but the company reportedly may again increase prices at the end of February, following the presentation of India’s federal budget.
"The (current) increase is not enough to cover the rising cost," said Philip Eapen, MRF’s executive director for marketing. Although rubber prices eased in late 2006, the price increases for this essential commodity have eroded the company’s operating margins. Raw materials, predominantly rubber, make up about 70 per cent of the cost of each new tyre.
MRF’s rival’s Ceat Ltd. has also stated it is evaluating whether or not to increase its own prices.