The domestic tyre industry has invested over Rs 35,000 crore in new capacity creation and debottlenecking over the last three years. The investments have been undertaken across key tyre segments, with the major beneficiary being manufacture of Truck & Bus Radials (TBR) and Passenger Car Radials (PCR), said Satish Sharma, Chairman, Automotive Tyre Manufacturers’ Association (ATMA).
The new capacity will help the industry register a turnover of Rs 1 lakh crore in the next three years, from Rs 75,000 crore currently.
The new capacities will go on stream over the next couple of years, to meet demand in an economy poised to remain the fastest growing over the next few years. Demand is expected to be strong in view of an uptick in economic activity and the big push envisaged for infrastructure growth.
While the external environment continues to be challenging, there are several tailwinds to the tyre sector’s growth domestically. Different segments of the auto sector have reached or are reaching pre-pandemic levels in size and scale, aiding demand for tyres. The rural economy is also picking up in view of the normal monsoon. The festive season has led to a resurgence in auto sales. Premiumisation of the passenger car market, with a preference for SUVs, has created an exponential rise in demand for higher profile tyres of 16 inches and above.
The policy/ regulatory environment is geared to encourage competitiveness. The Government’s recent decision not to renew registration of 15-year-old government vehicles will make road transport safer, more fuel efficient and technologically advanced. At the same time, phasing out of old vehicles will create demand for new vehicles, benefitting a host of associated sectors, including tyres, and kick off a cycle of economic growth, Sharma said.
The Indian tyre industry recorded a 50 per cent jump in exports in FY22. And, despite recessionary trends in the key export markets, exports have registered double-digit growth in the ongoing year too.