Bike Makers faces increased input costs

With the increasing cost price of raw materials for two wheeler and three wheeler manufacturers, it is estimated that the companies like those of Hero Honda, Bajaj Auto and TVS are expected to perform better than the second quarter in terms of operating profit margins. All the three above mentioned companies accounts a share of 80% in the two wheeler market of India.

The companies suffered from high costs of rubber, steel and other essential products during the quarter and have made a beeline for purchases due to the fear of rise in retail prices this month and tighter finance norms of banks. Talking for India's largest two-wheeler maker, Hero Honda, it grew by 28.5% in the third quarter as compared to the second one, Bajaj which is the second largest of the country accounted a growth of 17 percent and TVS, the third largest grew by 39.8 percent.

As per the statements of Vineet Hetamasaria, the vice president (research) of Pinc Research, it is acquired that the prices of raw materials have been continuously increasing since the month of April last year and are yet not expected to get stable. The only good thing happening is the huge retail demand experienced by the companies with which it is quite easier to manage the financial operation.