Indian trucking organisation threatens Apollo boycott

Indian media sources report that the All India Motor Transport Congress (AIMTC), an organisation said to represent around seven million trucks, has announced plans to cut supplies of raw materials to Apollo Tyres’ factories in Tamil Nadu, Kerala and Gujarat. On top of this, the AIMTC apparently intends to block the supply of Apollo products to the market. The reason for this action is said to be discontent with the price increases Apollo has implemented in recent times, and other tyre makers are also under threat of boycott.

As the financial daily Business Standard reports, transporters claim tyre prices have risen 52 per cent within a short period of time. “We have decided to boycott the inbound and outbound transportation from all Apollo Tyres facilities from June 2. If the tyre prices are not reduced in ten days, we will also boycott services at the facilities of other tyre companies also,” the newspaper quotes AIMTC president G R Shanmugappa as stating. Shanmugappa also commented on government silence regarding concerns that tyre manufacturers are engaging in cartel activities.

Apollo Tyres declined to comment on the threatened action, the Business Standard adds, as it has yet to receive official notification from the AIMTC. In an e-mail, Apollo commented to the paper that “in the last 12 months, raw material prices have moved up by more than 40 per cent and natural rubber, which constitutes 50 per cent of the raw material, increased by 70 per cent in FY11 as compared to FY10.” Apollo also stated it attempted to absorb rising costs to a certain degree by increasing internal efficiencies before increasing prices: “The total price increase taken in this period was only 16 -17 per cent. This massive difference in the cost push and the price increases have resulted in our profits going down by more than 30 per cent.”