Tyre Industry

TYRE INDUSTRY In INDIA An Overview

Presented By : HITIKANT SAHOO

Industry overview

• $85.0 billion industry globally • Indian industry worth $3 billion • Tyre off take @ 6.9% over the past 5 years • Projected CAGR of 8.9% over the next 5 years

Market Segments

Historical and Projected Growth Rate

Market players Indian • MRF • APOLLO • JK TYRE

International 22.0% 20.0% 19.0%

• CEAT 16.0% • BIRLA 7.0% • GOODYEAR 6.0%

• BRIDGESTONE • MICHELIN • GOODYEAR

21.4% 19.2% 16.9%

Outlook on Demand & Supply • Drivers of demand • Supply can be met by domestic players • Face competition from imported tyres

Market drivers • Robust growth rate in all vehicular segments over last 5 years • Improved capacity utilization by all major manufacturers(>80%) • Decrease in custom and excise duties to nullify increase in raw material costs and increases OPM • Low labour cost : partially offset by low productivity • Improved credit profile and loan serviceability

Market challenges • The Radialisation challenge- Radial vs. Cross ply Tyres

Positives

Why use Radial tyres?

Longer life -80,000 kms Better fuel efficiency – 5 to 8%

Negatives

Comparatively Higher Cost Marginally poorer overloading

Lower aspect ratio- Better control

• Other challenges –Poor roads Misperception that they are unsuited for India Difficulty to integrate in old vehicles Lack of radial manufacturing capabilities

Market challenges • Over dependence on the commercial vehicle segment Globally-Passenger transport accounts for 33% of product mix India- 81% of tyre market is for commercial vehicles • Export issues Low radial tyre production capability hampers export potential • Hurdles in becoming global player

Scope and challenges • Industry poised for a very good growth rate • More J.V’s with world market leaders- better technical know-how and quality • Growth in automobile sector – cumulative effect on tyre industry • Increasing trend in capacity utilization – better output • New and uncharted territories as export markets.

Thank you