Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

CRISIL MI&A and ATMA: Tyre industry on a roll, driving towards doubling in size

Posted On: 2023-07-03 20:46:59 (Time Zone: IST)

Higher demand for vehicles, infrastructure development to spur growth

The Indian tyre industry is on course to more than double its revenue to $22 billion by fiscal 2032 from $9 billion in fiscal 2022, according to a report by the Automotive Tyre Manufacturers' Association (ATMA), based on a comprehensive study by CRISIL Market Intelligence & Analytics (MI&A) Consulting.

The primary drivers are rising demand for vehicles and sharp focus on - and continuous government investments in - infrastructure. Additionally, a large and growing population of vehicles will continue to support tyre demand in the replacement market.

India is among the leading tyre manufacturers globally. Apart from conventional radial and bias tyres, the industry offers advanced smart, noise-reduction, puncture-proof and electric vehicle versions. It is also expanding presence in the premium and luxury tyre segments, which are dominated by imports.

The study estimates the industry's turnover will increase a solid 100 basis points to 3.4% of India's manufacturing gross domestic product (GDP) by fiscal 2032 compared with 2.2% in fiscal 2022. Further, its contribution to Goods and Services Tax (GST) will rise to $4.1 billion from $2.0 billion, number of jobs supported to 3.7 million from 1.9 million and share in global trade to 4.5% from 3.1%.

Research and development (R&D) expenditure of the industry is forecast to more than double to $151 million from $64 million, after growing threefold in the past five fiscals.

Adoption of emerging technologies and Industry 4.0 concepts such as artificial intelligence and machine learning to improve efficiencies, along with technical and safety regulations, has prompted tyre makers to allocate significant expenditure towards R&D.

Says Anshuman Singhania, Chairman, ATMA, and Managing Director, JK Tyre & Industries Ltd, "The Indian tyre industry has the potential to lead domestic manufacturing on the global stage. This could be India's moment if we are able to seize the opportunity offered by China + 1 policy by promoting sectors such as tyre manufacturing, which has proven credentials. Today, India has some of the finest radial tyre manufacturing facilities in the world and the products are world class, as is evident from rising demand for them worldwide. India-manufactured tyres are being exported to more than 170 countries, with the US and Europe buying the most. It is time the industry is empowered in terms of raw material security and by pulling down barriers affecting exports."

There is already considerable facilitation as well. Anti-dumping and countervailing duties, and Atmanirbhar Bharat have helped substantially reduce tyre imports from Southeast Asia and China.

On the indigenisation front, the 'India Natural Rubber Operations for Assisted Development' project - a public-private partnership between select tyre majors, the Rubber Board, and the government - is a landmark initiative where the consuming industry is directly helping develop 2 lakh hectare of rubber plantation in northeast India.

On the flip side, increasing cost of raw materials is chewing away profit margins, while dependence on imports for certain raw materials continues.

Infrastructure constraints, challenges in competing with Southeast Asian rivals, increased capital expenditure (capex) and R&D requirements, and cheap imports are the other roadblocks for an industry where competition is also high due to multiple domestic and international makers.

Says Hemal N Thakkar, Director & Practice Lead, Transport, Logistics and Mobility, CRISIL MI&A Consulting, "The Indian tyre industry has become one of the dominant players globally, with state-of-the-art manufacturing technology, scale and efficiency. This is reflected in the fact that exports contribute nearly one-third of the production in value terms. However, the government's focused approach can provide the required edge to further improve the industry's global competitiveness, in turn also sharply increasing the country's foreign exchange earnings."

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

CRISIL Ratings: Complex fertilisers volume to grow 4-5% next fiscal

Issuances of securitised debt instruments (SDI) by corporate entities to rise to Rs 100 crore in FY2024: ICRA

Godrej Interio's 'HomeScapes' Study reveals Indians want ‘Me-Time’ at home

GDP growth to moderate to 6.0% in Q3 FY2024, led by agriculture and industry: ICRA

Indian stock exchanges rank first in the world in terms of the number of IPOs in 2023

CRISIL Ratings: After soaring this fiscal, airlines to land >20% operating profit growth next fiscal

Rising frauds propel demand for AI/ML strategies: Experian Study

Cement makers to add 150-160 MTPA capacity by fiscal 2028 - CRISIL

Investor exuberance propelling broking industry performance, MTF achieves a new high: ICRA

CRISIL Ratings: Securitisation volume up ~20% in first nine months of this fiscal

India is fastest growing large economy globally in CY2023-CY 2024 - Pantomath Report

CRISIL Ratings: Market share of gold-loan NBFCs steady despite bank competition

CRISIL Ratings: Vehicle loan AUM to vroom past Rs 8 lakh crore next fiscal

45% of Newbie traders claim that 'not knowing enough' is the primary reason for losses incurred in Futures & Options trading - Sharekhan's survey reveals

CRISIL Ratings: Agri pump makers to see 7-9% revenue growth next fiscal

Indian mutual fund industry likely to sustain its strong inflows in 2024: ICRA Analytics

CRISIL Ratings: Operating profit of offshore rig operators to swell 30% next fiscal

CRISIL Ratings: Organised F&G retailer revenue to grow in mid-teens next fiscal

CRISIL Ratings: Shippers see a further revenue dip of 5-7% next fiscal as charter rates course correct

82% of professionals are concerned about job redundancy due to emerging technologies: Hero Vired Report

UPI transactions witnesses 118% rise at retail stores in 2023: PayNearby Report

Happy Forgings Limited - IPO - A trusted supplier for several Indian and Global OEMs - Reliance Securities

CRISIL Ratings: Penetration of electric buses set to double next fiscal

India's refined copper consumption to grow by 11% in FY2024, despite global headwinds: ICRA

CRISIL Market Intelligence and Analytics - Curb on cane juice for ethanol - Sugar output lift

Stable Repo Rates to Keep the Momentum Going for the Housing Market - Anuj Puri, Chairman - ANAROCK Group

Payback period for investment in sustainable warehouses come down to three years in India: A JLL - IndoSpace report

CRISIL Ratings - Profit margins of cotton yarn spinners to plunge 250-350 bps to decadal lows of 7-8% this fiscal

Government, PSUs, and Defence sector experience 14% upsurge in hiring: foundit Insights Tracker

CRISIL Ratings: Spirits high for organised liquor makers, revenues seen up 13%

Corporate bond market to more than double by fiscal 2030 - CRISIL

Gas Utilities : Gas consumption at record highs, growth now to trickle - Kotak Institutional Equities

Emkay and Geojit increase target prices of LIC, expect over 20% upside

CRISIL Ratings: Mall area to rise by 35% over the medium term on retail surge

Crop & Chemical Dashboard: Bottom is near, recovery unclear - Kotak Institutional Equities

Loan sell-downs of personal loan pools may see a temporary pause following the RBI's decision to increase risk weights: ICRA

India Surges Ahead in 5G Deployment, Paving the Way for a High-Tech Future!

CRISIL Ratings: Construction equipment revenue to grow 14-15% this fiscal

India to contribute 22% to the Global ER&D sourcing market by FY30: BCG-nasscom Report

CRISIL Ratings: In a decadal first, revenue of agrochemicals makers to slip ~3% on tepid demand this fiscal

CRISIL Ratings: Flexible packaging industry stares at decadal low profitability as oversupply stings

CRISIL Ratings: Domestic demand, softer cotton prices to sustain RMG growth

CRISIL Ratings: Higher workplace occupancy to light up cigarette volume 7-9%

CRISIL Ratings: Apparel retailers to grow 7-8% this fiscal via expansion, festival spur

CRISIL Ratings: For tea companies, ~8% revenue degrowth brewing this fiscal

CRISIL Ratings: Revenue of paper makers to crumple 8-10% this fiscal

ICRA expects banking sector to stay resilient, outlook remains Positive

CRISIL MI&A: Red-hot domestic demand to stave off steel price melt this fiscal

CRISIL Ratings: Replacement demand to drive tyre volume up 6-8% this fiscal

CRISIL Ratings: Home textiles makers to weave revenue, profitability rebound this fiscal

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020