Expanded production capacity as well as higher state expenditure on infrastructure creation and a focus on high-end tyres are expected to usher in further growth for Yokohama India, the company’s MD and CEO Harinder Singh told FE.
The company’s CAGR grew 23% since 2020.
In a conversation with FE, Singh said that the company is expanding passenger car tyre production capacity to meet the increasing demands from the local market.
“Around $82 million has been allocated for setting up a new production unit in Visakhapatnam (Vizag). This investment demonstrates our commitment to expanding manufacturing capabilities and meeting the growing demand for tyres in the market,” Singh said.
“With this additional investment, the company looks to increase the annual passenger car tyre production capacity in India from the current 2.8 million to 4.5 million tyres by 2025,” he said.
According to Singh, the investment in the Vizag plant reflects the company’s commitment to the “Make in India” initiative and positions it to capture a larger share of the premium SUV market by offering locally-manufactured, high-end tyres.
Presently, Yokohama India has a manufacturing unit in Bahadurgarh, Haryana, which was built with an investment of `300 crore. To date, the company has invested around $154 million in the plant.
Besides, the recent restriction on the import of tyres for aftermarket replacements has also aided the company’s growth.
“We’ve always been committed to local manufacturing, producing up to 97% of our products right here in India, even prior to the government’s restrictions on tyre imports in June 2020.”
Furthermore, Singh said that the recent restriction on the import of tyres for aftermarket replacements has resulted in a significant drop in the number of imported tyres available in the market, with a reduction of 90%.
“Local production helps reduce costs, lead times and dependency on imports, contributing to a more sustainable and competitive business model,” he said, adding that currently, the company has a market share of over 8% in the India replacement market.
“Overall, the move towards faster and more economical localisation, combined with the capability to manufacture tires up to 22 inches, positions Yokohama India to better serve the growing market demand for SUVs, MPVs and premium vehicles in the country,” he added.
In addition, Yokohama India expects that the rapid growth of infrastructure, particularly the highway network, will have significant implications for the automotive industry and the demand for tyres.
Additionally, the tyre manufacturer anticipates being in a better position to cater to the needs of OEMs, providing them with high-quality tyres tailored to their specific vehicle models.
“Expanding the product range and production capabilities to include premium and larger tyres is a strategic move that aligns with the evolving preferences of customers and the growing demand for such tyres in the Indian market,” he said.
At present, Maruti Suzuki is the main OEM customer of the tyremaker. It had previously supplied tyres to European and Japanese premium brands in India.
