Indian MD Warns Of Falling Margins

Unless there is a dramatic revision in prices of crude oil and natural rubber, margins for tyre manufacturing sector may decrease in 2008-09, according to Mr Paras Chowdhary, Managing Director of Indian manufacturer Ceat Ltd.

“The tyre sector is facing tremendous cost push. Considering the overall economic situation it might not be easy to pass on this burden in entirety, on the consumers in the coming months.

Accordingly, margins may come down in the next fiscal especially in the April-June 2008 quarter” Mr Chowdhary is reported as saying on the Indian website Business Line. However, he added that a decline in crude oil prices might improve the situation.

On the performance of Ceat in the first quarter of 2008, it was a case of ‘wait and see’ said Mr. Chowdhary, as “March sales traditionally play a significant role in the performance of the tyre companies.”