Road uphill, Punjab bike makers eye price hike of up to 7%: The Tribune India
Vijay C Roy
Chandigarh, March 3
Punjab bicycle manufacturers are planning to increase the price by 5-7% to offset the impact of high input costs such as steel, nickel, zinc and plastic prices. The hike is expected to be announced by the middle of this month.
India produces about 2.2 crores of bicycles every year. More than 1.5 crore bicycles per year are manufactured in Ludhiana. Steel constitutes almost 85% of the raw material in the manufacture of bicycles. Over the past two months, steel prices have risen by almost Rs 7,000 per ton.
According to manufacturers, commodity prices have risen over the past two months, and the conflict between Russia and Ukraine has again led to a sharp increase in rates.
“In the past 15-20 days alone, steel prices have increased by Rs 4,000 per ton. Especially after the Russian-Ukrainian conflict, prices increased by Rs 2,500 per ton. We expect another increase of Rs 5,000 in 10 to 15 days, if the conflict continues. In addition, the price of nickel increased by Rs 500 per kg after the conflict. We are in a pickle. We need to absorb the cost now as the export contracts are for two to three months, but we cannot continue in the near future. We are therefore considering increasing the prices by 5-7% to offset the cost,” said Onkar Singh Pahwa, CMD, Avon Cycles Limited.
He justified the hike by saying the industry is forced to do so because the cost of key raw materials like nickel and steel has risen sharply. “We may not be able to continue
at this price, so most likely by the middle of this month we will increase them,” he added. With the increase, a standard bike will likely cost Rs 190-Rs 220 more.
“Steel prices have been rising over the past two months. The prices of raw materials such as steel, nickel, zinc still increased by 10 to 15% after the Russian-Ukrainian conflict. The industry will increase prices by up to 7%,” said Charanjit Singh Vishwakarma, former president of the United Cycle and Parts Manufacturers Association (UCPMA). He urged the government to set up a Steel Regulatory Commission to regulate prices.
Among the most affected are manufacturers of bicycle parts. Ludhiana alone accounts for 92% of the country’s bicycle parts manufacturers. “Commodity prices are increasing day by day. We are in a catch-22 situation as we cannot request an immediate price revision from the original equipment manufacturers as pending orders have been contracted on old prices. We have nevertheless asked them to revise the prices and we hope that something positive will be done,” said Rajeev Jain, partner of R&R Bikes and president of Laghu Udyog Bharti.