The Indian Tyre Industry is on the Right Track of Growth

The automobile industry in India is growing at a rapid pace. It contributes to a roughly 7.1 percent of the country’s GDP. The industry is quite diverse and consists of almost all type of vehicles. It has an equally important ancillary industry, the Indian tyre industry that provides them the vital component for their vehicles.

The automobile industry mainly consists of two & three wheelers, passenger and commercial vehicles. The swing in demand and supply in this industry directly affects the Indian tyre industry. Furthermore, both the industries normally manufacture products in the following two segments:

1. Original Equipment Manufacturer
2. Replacement Market (Aftermarket)

The tyre industry is dominated by the replacement market constituting 56 percent of the total market size. ATMA or Automotive Tyre Manufacturers’ Association lists 39 companies in this industry. The industry is valued at 535 billion in 2015-16. According to the sales figures of the Fiscal year 2015-16, two & three wheelers dominates the market (53%) followed by passenger vehicles (28%) and commercial vehicles (16%).

The Indian tyre industry follows two design principles i.e. radial and cross-ply to produce two distinct types of products namely tube and tubeless. Their differences can be understood by their self-explanatory names. The Indian companies are increasingly using the radial design methodology in their production. Most of the Automotive Tube Manufacturers in India employ advanced technology during their manufacturing process to produce quality products. Generally, three types of rubber are used during the production phase:

1. Natural Rubber (NR)
2. Styrene Butadiene Rubber (SBR)
3. Poly Butadiene Rubber (PBR)

The natural rubber constitutes 70 percent of the total rubber content in India quite contrary to the normal standard of 30-40 percent in other parts of the world such as USA, China, Europe and Japan. The main reason for such high quantity of natural rubber is that India is one of the largest producers of rubber. They have better heat absorbing capability and are easily adaptable to rough road conditions compared to their synthetic counterparts.

The industry heavily depends on the sales figures of automobiles. The favorable Government policies and announcements of several new reforms for the automobile industry have given it the required push to flourish and profit like never before. With the demand for vehicles in the two & three-wheeler segment increasing each year, the sales figures are only meant to go northwards.

The expectation for the growth for the Fiscal Year 2017-18 is around 10-11 percent. As always, the demand in the replacement market segment will be comparatively higher from the last year. The positive outlook means greater things are there to come for the automobile tire tube manufacturers in India in the coming years. They only need to build high-quality products for all road and weather conditions.

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Metro Tyres Joined: July 31st, 2017