Domestic Tyre Brands Sight Positive Demand, Capacity Addition On

Finally, a ray of good hope has surfaced among the tyre manufacturers in the country, as they set up their plans for the increase in capacity forecasting positive growth potential. The tyre companies in India are confident on the strong consumer demand in passenger and commercial vehicle segments. One of the firm contributors to this demand is the coming down of Chinese tyre imports thanks to the imposition of anti-dumping duty, which facilitated domestic players to expand their capacity utilisation levels.

Apollo Tyres Expansion

The Gurugram headquartered tyre manufacturer, Apollo Tyres will invest Rs 1,800 Cr. in its new manufacturing facility situated in Chinnapanduru village, Chittoor district, Andhra Pradesh. This unit will be dedicated to the production of passenger car radials (PCR). In addition to PCR, Apollo will also be increasing its truck and bus radial (TBR) tyre capacity. Currently, it churns out around 9,000 TBR tyres per day, which will be amplified to 11,500 tyres by this year-end.

Alongside, by the end of the ongoing financial year its PCR (passenger car radial) hold up would be on stream due to which Apollo is mulling to increase the production capacity by 10 percent during this year. The latest word from Apollo management underlined the positive demand outlook aspect in coming months due to an upsurge in OEM sales, revival in replacement demand and drop in the import of Chinese tyre.

JK Tyres Expansion

One of the major players in the TBR (medium and heavy commercial vehicle) tyre segment, JK Tyres controls over more than 30 percent of market stake in TBR category. The leading tyre maker with as many as 9 manufacturing facilities in the country is mulling over greenfield/brownfield capacity increase to 100 percent for its TBRs capacity. Recently, company’s management took the decision to raise a fund of Rs. 1,000 crore in support of the expansion.

CEAT Tyres Expansion

Another famous tyre marquee CEAT has already hit the full capacity accelerator for both TBR and TBB (truck bus bias) tyre capacities. CEAT has drafted a capex of Rs 450-500 crore for the current fiscal, moreover, the capex will be increased to Rs 1,500-1,700 crore for the subsequent year. There will also be an investment in the TBR capacity. Also, some portion will be invested in the TBR capacity, which will come on stream at the time of the third quarter of the next fiscal.

According to industry experts domestic tyre players such as Apollo, JK Tyres and MRF etc., will benefit largely from the factors like growing preference for higher tonnage trucks, limitations on overloading and increased government thrust on infrastructure will lead to the increase in sales volume of commercial vehicles.

The tyre manufacturers in India have taken a respite due to the imposition of anti-dumping duty on Chinese tyres in September last year. The replacement demand is estimated upsurge in the coming months. The TBR tyre import has gone down from 150,000 units per month from pre-demonetisation period to about 50,000 units a month now. Another helping hand in the encouraging demand has been the present hike in the customs duty on TBR tyres, which has made Chinese tyre expensive than the domestic tyres.