Tyre market in India is on a revival mode with some demand growth in the coming years. Starting this year, major user segments like mining, construction and material handling (ports) have become more active with government opening up coal blocks, investment plans for roads, ports and other infrastructure segments. In line with these developments, some positive moves are also visible in the tyre industry in terms of quality products and innovative design concepts.
The tyre industry has welcomed the Budget 2015-16 in terms of the proposals for increased spend on infrastructure and road sector development. However, the industry was expecting correction in inverted duty structure in the tyre sector, which was not addressed in the budget.
Industry analysers predict the tyre demand to pick up during 2015-16. ICRA foresees a favourable outlook for the Indian tyre industry over the next 12 months. Expected growth in domestic tyre volumes of 9-10 per cent during 2015-16, with pickup in auto demand and an improving economy; continued benefits of lower raw material costs, particularly during H1, 2015-16; and anticipated increase in exports are expected to support demand for the industry, according to the report.
Though mining and off-the-road segments are not major demand drivers, most of the tyre manufacturers have renewed their focus on these markets and new products and innovations are being brought out on a regular basis. The past few months saw launch of tyres for mining, loader and other off-the-road applications. The tyre majors are also keen on innovating raw materials and different compounds for better products in specic application areas.
Size: Rs 525 billion (FY14)
Revenue CAGR (FY11 to FY14): 13.5%
Segment mix (in tonnage): FY14
Product mix (in tonnage): FY14
Commercial vehicles: 54%
Passenger vehicles: 17%