According to a new report by the Automotive Tyre Manufacturers Association (ATMA), the domestic tyre industry is riding high on fresh capacity addition and improving production, and it is hoping to generate a projected revenue of USD 3 billion or INR 25,000 crore in the next three years, and it hopes to cross a turnover of INR 1 lakh crore. At present, the total turnover of the country’s tyre manufacturing business amounts to INR 75,000 crore.
Satish Sharma, who is the Chairman of ATMA, says that the extra capacity will come online over the next couple of years to meet the growing demand in an economy that is expected to keep growing at the fastest rate for the next few years.
“Demand is anticipated to strengthen in light of the increase in business activities and the significant push that is anticipated for the expansion of infrastructure. Sharma noted that even though the external climate is still difficult, the tyre industry is benefiting from a number of positive local trends that are propelling its expansion. Several subsets of the automotive industry have already achieved or are in the process of approaching pre-pandemic levels in terms of size and scope, which has helped in driving up demand for tyres “Sharma remarked.
According to a survey done by ATMA, the national market has already finished investing more than INR 35,000 crore in the space of the past three years. This was made possible by increased efficiency brought about by debottlenecking and the establishment of new capacity. In addition to this, it was mentioned that the investments that have been made during this difficult time period range across all of the important tyre sectors, with the manufacture of truck and bus radials (TBR) and passenger car radials (PCR) being the principal beneficiaries of these endeavours.
“In light of typical monsoon conditions, the rural economy is also showing signs of improvement. The holiday shopping season has contributed to a recent uptick in automobile sales. “As a result of the premiumization of the passenger vehicle industry and the clear preference for SUVs, there has been an exponential increase in demand for higher profile tyres for wheels 16 inches and larger,” Sharma explained.
He went on to say that the policy climate in India is oriented to support the industry’s competitiveness, which he stated as another point of discussion. “The recent decision made by the government to not renew the registration of government vehicles that are older than 15 years, including vehicles operated by the Central and State Governments, Local Government Bodies, State Transport Undertakings and PSUs, will make road transportation safer, more fuel efficient, and more technologically advanced. At the same time, the gradual elimination of older cars will generate demand for new vehicles, which will be to the advantage of a wide variety of connected industries, including the tyre industry, and will initiate a cycle of economic expansion,” said Sharma.
According to the findings of the ATMA research, there is also a significant investment in R&D. The government has been putting a lot of effort into developing the infrastructure for testing, and they have just opened a test track that is the biggest in Asia and the fifth largest in the world.
According to information provided by ATMA, the tyre business in India had an increase in exports that was 50 percent higher in FY 22. It was highlighted that even though there has been a general tendency toward recession in the major export markets, exports have climbed by double digits so far in the current year. According to ATMA, “Indian technology is aligning with that of the rest of the world, and the addressable market for tyre makers has risen; as a result, the emphasis is being placed on exports.”
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