Economy

Tyre industry seeks measures to reverse slide in domestic production

V. Sajeev Kumar Kochi | Updated on January 13, 2018 Published on March 06, 2017

tyre

Raising concerns over the continued slide in truck and bus radial tyre production, the Automotive Tyre Manufacturers' Association (ATMA) has said the emerging situation has sent alarm bells ringing for the tyre industry.

From more than 5.5 lakh truck and bus radials in June last year, production had declined 20 per cent to 4.5 lakh radials in December 2016 as the economy slowed and dumping of Chinese radials went up, the latest data released by ATMA has revealed.

Truck & bus radial (TBR) tyres has been the fastest growing segment in the tyre industry, accounting for two-thirds of the ₹35,000 crore investments made in recent years.

With new capacities going on stream and declining production, the industry is staring at the grim prospect of gross underutilisation of TBR capacities. Truck and bus tyres account for 55 per cent of the tyre industry’s revenues in India.

“It’s a tough environment for tyre manufacturing in India. The industry has been squeezed from both the input and output sides. Indiscriminate surge in Chinese radials and slowdown in commercial vehicle sectors has been hurting tyre production in India. Over the last one year, the industry has hardly grown in size and the top line is under pressure,” said K.M. Mammen, Chairman, ATMA.

The situation, coupled with increasing cost of all inputs, is affecting the viability of tyre companies. In view of the excess capacities and continued surge in Chinese tyre imports, he said the industry was not in a position to pass on the increased cost of production.

ATMA in a communication to the Commerce Ministry said the contraction in tyre manufacture is a matter of grave concern and policy enablers need to be put in place for the growth of the Industry and to redeem the investments made.

Contraction in tyre manufacturing is also a dampener for rubber growers as the tyre industry consumes more than 65 per cent of the domestic natural rubber production, it said.

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Published on March 06, 2017
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