Since its invention, tyres are what has helped drive mobility and in turn evolution of mankind moving, literally. And as per the latest data shared by the Automotive Tyre Manufacturers Association (ATMA), the apex body representing the tyre and radial manufacturers in India, around Rs 35,000 crore worth of investments towards new capacity creation and debottlenecking has happened in the country.
The investments that have been undertaken in a challenging time period, span across all the key tyre segments with major beneficiary being truck & bus radials (TBR) and passenger car radials (PCR) said Satish Sharma, Chairman, ATMA.
The new capacity will help the industry notch a turnover of Rs 1 lakh crore in the next 3 years from Rs 75,000 crore currently. The expansion will go on stream over the next couple of years to meet the growing demand in an economy that is poised to remain as the fastest growing for the next few years. Demand is expected to grow stronger in view of uptick in economic activities and the big push envisaged for infrastructure growth.
ATMA says while the external environment continues to be a challenging one, there are several tailwinds to tyre sector’s growth domestically. Different segments of the auto sector have already reached or are reaching pre-pandemic levels in size and scale aiding demand for tyres. In view of the normal monsoon, the rural economy is also picking up. Festive season has led to a new resurgence in auto sales. Premiumisation in the passenger vehicle market with clear preference for SUVs is creating an exponential rise in demand for higher profile tyres for 16-inch wheels and above.
The apex body says the policy/regulatory environment in India is geared to encourage competitiveness of the industry. The recent move by the government regarding non-renewal of registration of 15 year old government vehicles including the ones owned by the Central and State governments, local government bodies, STUs and PSUs will make road transport safer, more fuel efficient and technologically advanced. At the same time, phasing out of the old vehicles will create demand for new vehicles benefitting a host of associated sectors including tyre and kick off a cycle of economic growth, added Sharma.
Then there is also a massive spending on R&D. The government has been focusing on improving the testing infrastructure and has launched a test track which is the largest track in Asia and the 5th largest in the world.
In FY2022, the Indian tyre industry recorded a 50 percent jump in exports. And despite recessionary trends in the key export markets, the exports have increased in double digits in the ongoing year too. Indian technology is converging with the world and the addressable market for tyre manufacturers has increased, and therefore, the accent on exports.