Prices on a roll

The intense competition in the automobile sector has prevented the car manufacturers from raising prices. However, this is not true of auto ancillaries. The prices of car tyres have increased by an average of 7.5% a year in the past 16 years. This is faster than the 6.6% average increase in the consumer prices.

Then: The retail price of a non-radial tyre for a mid-sized car was Rs 900 in 1992.

Now: A radial now costs Rs 2,900, a 222%rise in 16 years.

Then: If the price of car tyres keeps rising at the same rate, one tyre will cost Rs 9,100 in 2024.

Car-owners will feel the pinch because tyres need to be replaced after every 50,000 km or so. The cold comfort is that many people don’t keep a car for more than four-five years. So, by the time the tyres are worn out, the owner has already decided to upgrade to a new car.