Uphill road ahead, Punjab bicycle makers mull up to 7% price hike

Vijay C Roy

Chandigarh, March 3

Bicycle manufacturers in Punjab are contemplating 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 likely to be announced by the mid of this month.

India produces about 2.2 crore bicycles every year. Over 1.5 crore bicycles per annum are manufactured in Ludhiana. Steel constitutes almost 85% of the raw material in bicycle manufacturing. In the past two months, steel prices have risen by almost Rs 7,000 per tonne.

According to manufacturers, the raw material prices have been rising for the past couple of months and the conflict between Russia and Ukraine has further led to a sharp increase in rates.

“In the In past 15-20 days alone, steel prices have risen by Rs 4,000 per tonne. Especially after the Russia-Ukraine conflict, the prices have risen by Rs 2,500 per tonne. We are expecting another Rs 5,000 increase in another 10-15 days, if the conflict continues. Also, nickel price has risen by Rs 500 per kg after the conflict. We are in a fix. We have to absorb the cost as of now as export contract are made for two-three months but we can’t sustain in near future. So we are contemplating to increase the prices by 5-7% to offset the cost,” said Onkar Singh Pahwa, CMD, Avon Cycles Limited.

He justified the hike, saying the industry is forced to do so as the cost of the basic main raw material like nickel and steel went up sharply. “We may not be able to continue

at this price so most probably by the mid of this month we will increase them,” he added. With the increase, a standard bicycle is likely to cost Rs 190-Rs 220 more.

“The steel prices have been rising for the past couple of months. The prices of raw material such as steel, nickel, zinc has further risen by 10-15% after the Russia-Ukraine conflict. The industry is going to raise the prices up to 7%,” said Charanjit Singh Vishwakarma, former president, United Cycle and Parts Manufacturers Association (UCPMA). He urged the government to set up a Steel Regulatory Commission to regulate the prices.

Among the worst-affected are bicycle parts manufacturers. Ludhiana alone accounts for 92% of bicycle parts’ manufacturers in the country. “Raw material prices are increasing on a daily basis. We are in catch-22 situation as we can’t ask for immediate price revision from the Original Equipment Manufacturers because the orders in hand were contracted on old prices. Still we have requested them to revise the prices and we expect something positive will be done,” said Rajeev Jain, partner, R&R Bikes and president of Laghu Udyog Bharti.