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Tyre manufacturers are buoyant on near-term prospects with a pick up in orders from original equipment makers (OEMs), stable replacement demand and a significant drop in tyre imports.
The industry’s growth is pegged at 8-10 per cent during the current fiscal. Tyre segments such as passenger vehicles and two-wheelers, which are heavily dependent upon OEMs growth, are optimistic, Satish Sharma, Chairman, Automotive Tyre Manufacturers’ Association (ATMA), told BusinessLine .
While demand was briefly hit during Q1 of this fiscal, it remained favourable most of the time.
Orders from OEM have seen a spike on the back of rebound in automotive production across product segments during this fiscal.
“Tyre industry volumes are expected to grow at 7-8 per cent at about 1,805 lakh tyres during FY2018, despite the weak volumes during Q1 and part of Q2 during GST roll-out.
“We expect the demand to recover sharply in the second-half of this fiscal,” said Subrata Ray, Group Vice President – Corporate Ratings, Icra.
Overall, tyre demand in passenger vehicle, LCV and scooter segments are expected to grow in double-digit this fiscal, while truck and bus and motorcycle segments may see a growth in the range of 5-7 per cent.
Truck and bus radialImported tyres are largely fed in the unorganised, replacement market, a cash-dominated market with limited access to the banking system.
Indiscriminate import and dumping of truck and bus radial (TBR) tyres has witnessed a perceptible drop after demonetisation and GST implementation. From an average 1.5 lakh tyres per month last year, the imports have come down to 75,000 now, said Sharma.
This apart, the re-imposition of anti-dumping duty (ADD) in September 2017 on the import of new Chinese TBR (including tubeless) for five years also dealt a severe blow to imports.
Imports surgeTBR imports surged from ₹710 crore in FY2013 to ₹1,420 crore in FY2017 and accounted for a major share of TBR consumption in the country.
In the last fiscal, TBRs accounted for 43 per cent of total tyre imports (in values).
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