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India tyre market overview and outlook:

  • The Indian tyre industry is estimated to be worth more than USD 9 billion in FY19 across 40+ tyre companies and 60+ tyre manufacturing plants. The sector produces the largest variety of tyres in the world and employs 2 million people directly and more than 1 million indirect employment though dealers, retreaders, etc.
  • Following two strong years of growth (~12% and ~14% in FY2018 and FY2019 respectively), tyre industry revenue is estimated to grow at a lower rate of 3-4% in FY2020 affected by modest growth in OE tyre demand on the back of sluggish auto demand and expected moderation in tyre exports as well as impact of COVID-19.
  • Within the overall industry, the aftermarket or replacement segment is currently the largest accounting for 55-60% by volume, compared to the OEM segment. For the CV segment, the share of the replacement market is higher at around 70%. Currently radial tyres account for approximately 70% of the OEM business and 50% of the aftermarket business.
  • Despite a weak domestic market, leading tyre OEMs such as MRF and Apollo have managed to show some growth, mainly due to their export sales performance. These two brands, along with JK Tyres operate in several international markets and have established a strong brand name in these geographies, competing with local and regional brands.
  • In terms of regulations, the new axle norms in the CV segment in terms of higher axle load specifications led to a change in tyre specifications. To counter this, tyre companies partnered with auto OEMs to introduce vehicles that address the operator needs in line with the revised axle norms.
  • The past couple of years have been tough for the OEM companies owing to sluggish domestic growth across segments, especially in Commercial Vehicles. This is unlikely to reverse in the next 12-18 months as we wait to see the severity and extent of impact of COVID-19 in the overall automotive industry.
  • In FY21, tyre firms are expected to experience double-digit declines owing to slowdown in the economy, falling truck utilization levels, slower demand for passenger vehicles as a result of the COVID-19 pandemic induced lockdowns in place.

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Market Growth Drivers and Trends:

Most primary factors driving the Indian tyres market are:

  • Strong export performance
  • Lower raw material prices in the coming quarters
  • Favorable regulations aimed at the domestic market
  • Continued investments in R&D and technology

Potential Challenges: 

Key factors likely to restrain or slow down growth in the tyres market in India:

  • Economic slowdown owing to the COVID-19 pandemic
  • Decline in the commercial vehicles segment
  • Softened rural demand in FY20 and FY21 (expected)

Market Players Perspective:

  • The market for tyres in India is relatively concentrated with the top 10 manufacturers accounting for around 75-80% of the total market. Major players are MRF, Apollo Tyres and JK Tyres in both domestic and international markets, together accounting for ~60-65% of the overall market.
  • In FY19, MRF had revenues of Rs 15,837 crore followed by Apollo tyres at Rs 12,354 crore. However, Apollo led the domestic tyre market in terms of growth in the last 3 years with a CAGR of 12.6%.
  • Companies such as CEAT Tyres, Apollo and JK Tyres have all announced expansion plans and higher investments in new technologies and product development to remain relevant in a highly competitive market

India Tyres Market Research Scope: 

The base year of the study is 2019, with forecast done up to 2024. The report provides a detailed assessment of the Indian tyres market, including insights on the market dynamics, key drivers, challenges, regulations impacting the market, and value chain analysis.

We have also estimated the current market size in India and by tyre type, by region, by vehicle segment, by OEM/replacement, etc.; 5-year outlook of the market, factors driving growth along with regional insights and trends

The study also presents a thorough analysis of the competitive landscape, considering the market shares of the leading companies. These provide the key market participants with the necessary business intelligence and help them understand the future of the Indian tyres market.

Author – Prasanth R Krishnan
Associate Director – Operations
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