The Current Market Scenario of Indian Tyre Industry

After a sound 15% volume rise in the year 2014-15, the local tire demands are expected to mark a quieted 0-2% growth during the ongoing fiscal on the back of a 2.5% rise in the OEM segment. Going ahead, however, the local tire industry is supposed to improve in the coming 4 years, when consumption would grow in the scope of whopping 4-6%.

According to the most recent report by rating body ICRA, local tire manufacturing was influenced by the storm in tire imports (up 11-15% Financial Year 2016 expected) and drastically falling exports (down 13-15% Financial Year 16 anticipated). ICRA is in the hope the local tire consumption will rise by 4-6% in the coming 3 years (FY2016-18).

Besides, vast income growth is also expected at 4-6% for the Financial Year 2017 as against an expected negative rise of 2-4% for Financial Year 2016. It likewise includes that the overall revenues are supposed to stay at hoisted levels with bearish standpoint towards rubber and unrefined petroleum costs, yet current levels are unrealistic to be supported throughout the following 2 years.

The continued impuissance in OE demand in different key segments, weaker agricultural progression, consequent low-keyed rural demand; and purely muted infrastructural progress drastically affected tyre consumption during the Financial Year 2016. The report further demonstrates that domestic production also received heavy jolts because of the falling exports (as down as 13-15% FY16) and deluge in imports (as up as 12 -14% FY16) and. This is the phase when even the leading city tyres manufacturers in India has to lower their production.

The continued mildness in prices for input material, natural rubber (NR) and unrefined oil, has undoubtedly kept the profit margins of the industry at exalted levels throughout the Financial year 2016. With the expectation of betterment in demand and build-up of accruals, the city bike tyre manufacturers are expected to carry on investing towards production capacity expansions, especially in the two-wheelers segment that has been suffering from the capacity shortage since long.

More than 60% additions to the production capacity are expected to keep focus on the 2 wheeler segment, while around 45% will focus on TBR segment. On the whole, the tyre industry in India has always been a huge profit making business for the manufacturers. This production capacity also aims at minimizing the imports of radials from the country like China.

As per the report released by India’s Automotive Tyre Manufacturers Association, the imports of bus and truck radials into India increased 57% (280,000 units) during April and May month of 2016. More than 150,000 tyres were imported in May 2016 alone accounted for around 40% of India’s replacement market demand, as association figures indicate. So, minimizing the imports would also be another challenge for the Indian manufacturers in the times to come.

Metro Tyres is a well-known tyre company in India. It is one of the most reliable tyre brands in India and abroad known for the high-performance, best-quality products.