TYRE INDUSTRY In INDIA

An Overview

Presented By :

HITIKANT SAHOO
 Industry
overview

• $85.0 billion industry globally

• Indian industry worth $3 billion

• Tyre off take @ 6.9% over the past 5 years

• Projected CAGR of 8.9% over the next 5 years

Market
Segments
Historical and
Projected Growth
Rate
 Market players

Indian International

• MRF 22.0% • BRIDGESTONE 21.4%

• APOLLO 20.0% • MICHELIN 19.2%
• JK TYRE 19.0% • GOODYEAR 16.9%

• CEAT 16.0%
• BIRLA 7.0%
• GOODYEAR 6.0%
 Outlook on Demand & Supply

• Drivers of demand

• Supply can be met by domestic players

• Face competition from imported tyres

 Market drivers

• Robust growth rate in all vehicular segments over last 5 years

• Improved capacity utilization by all major manufacturers(>80%)

• Decrease in custom and excise duties to nullify increase in raw

material costs and increases OPM

• Low labour cost : partially offset by low productivity

• Improved credit profile and loan serviceability

 Market challenges
• The Radialisation challenge- Radial vs. Cross ply Tyres

Why use Radial tyres?

Positives Negatives

Longer life -80,000 kms Comparatively Higher Cost

Better fuel efficiency – 5 to 8% Marginally poorer overloading

Lower aspect ratio- Better control

• Other challenges –Poor roads

Misperception that they are unsuited for India
Difficulty to integrate in old vehicles
Lack of radial manufacturing capabilities
 Market challenges
• Over dependence on the commercial vehicle segment

Globally-Passenger transport accounts for 33% of product mix

India- 81% of tyre market is for commercial vehicles

• Export issues

Low radial tyre production capability hampers export potential

• Hurdles in becoming global player

 Scope and challenges
• Industry poised for a very good growth rate

• More J.V’s with world market leaders- better technical

know-how and quality

• Growth in automobile sector – cumulative effect on

tyre industry

• Increasing trend in capacity utilization – better output

• New and uncharted territories as export markets.

Thank you