project on tyar industry

8/10/2019 project on tyar industry

1/16

CHEPTER 1

INTRODUCTION OF INDUSTRY


2/16

HISTORY & DEVLOPMENT OF INDUSTRY

The origin of the Indian Tyre. The Indian Tyre Industry Industry dates back to 1926 when

Dunlop Rubber Limited set up the first tyre MRF followed suit in 1946. Since then, the

Indian tyre company in West Bengal. Indian Tyre Industry now provides direct and industry

has grown rapidly. indirect employment to nearly 1 million persons, including dealers,

retarders, growers of Natural Rubber, employment in raw material sector etc.

While the tyre industry is largely dominated by Contd. the organized sector, the unorganized

sector is predominant with respect to The total number of tyre dealers, geographically spread

all bicycle tyres. over the country is over 5,000 - serviced through over 500 depots of tyre A

vast majority of dealers handle multi-brands of tyres. Tyre companies. companies also have

exclusive retail distribution outlets.

Indian tyres are meant, and expected to perform, Contd. under different and extreme road

conditions, from kutcha village roads to newly constructed national highways, from extreme

cold to hot and wet conditions Indian Tyre prevailing in different geographical parts of the

country. companies also follow a unique warranty system whereby pro-rata adjustment is

There is a vast populationgiven for manufacturing defects through the dealers and production

of two-wheelers in India for which different sizes of tyres are required and produced.

Tyre Industry is highly Nature of the industry raw-material intensive. Raw materials cost

accounts for approx. 63% of tyre The industry is a major consumer industry turnover and

72% of production cost. of the domestic rubber market. Natural rubber constitutes 80% while

synthetic 62% ofrubber constitutes only 20% of the material content in Indian tyres. total

Natural Rubber consumption is by the Tyre Sector, balance by rubber based non-tyre

industries. Interestingly, world-wide, the proportion of natural to Total weight of raw-

materials consumed bysynthetic rubber in tyres is 30:70 Total Cost of Raw Materialsconsumed by tyretyre industry15.50 Lakh M.T. industryRs.16,000 Crores

Turnover of Indian Tyre industry in FY 2009-2010 Tyre Production (Tonnage) 13.50 lacs

M.T. Industry Rs. 25,000Crores Tyre Export from India (Value) :Production All

Categories (Nos.) 971 Lacs Industry Concentration 10 Large Number of tyre companies: 36

Rs. 3000 crores tyre companies account for over 95% of total tyre production.

Recent Observable trends in the Indian Tyre Industry Improved Robust growth rate in all

vehicular segments over last 5 years. capacity utilization by all major manufacturers

(Decrease in custom 80%) and excise duties to nullify increase in raw material costs and

increases OPM Improved credit Low labor cost : partially offset by low productivity.profile and loan serviceability.

Indian tyres have TYRE EXPORTS BY INDIAN TYRE INDUSTRY good acceptance in

global markets. Compounded Average Growth Rate (CAGR) of tyre Exports to over 65

countries exports in the last one decade has been 8%. worldwide. 17% export to highly

quality conscious US market. Other major export markets are - (countries in) Latin America;

UAE, Bangladesh, Iran, Philippines, Over 20% of truck and bus tyres (bias) produced

domestically are Vietnam, etc. exported. Emphasis now is on export of radial tyres, including

Passenger Car All large tyre companies are exporting as a long term commitment radial tyres.

Pricing a product is a Pricing Strategy in Tyre industry The tyre market is not very price

sensitive. function of many factors. Consumers are more concerned about the tyres

functionality, than its price. Besides, being a homogenous product, most tyre companies


3/16

price their tyres at more or less the same levels. International players such as Bridgestone

price their tyres slightly higher than the rest of the market. This is partially to demonstrate its

superior quality and pedigree.

Demand drivers of the industry

1) Industrial and freight The truck and bus tyre segment accounted for 19% of tyres

produced inactivity Every truck/bus manufactured generates a demand for seven India in

FY2008. tyres. In addition, the price of a truck tyre is significantly higher than that Thus the

demand multiple emanating of a passenger car tyre (roughly 10 times). from the commercial

vehicle segment is highest in value terms.

2) Personal purchasing power and disposable incomes in the hands of the Indian middle-

class burgeon, the sale of passenger cars has been witnessing an upward swing over the past

decade. Since tyre sales are directly linked to car sales, both through OEMs and the

replacement market, the tyre industry has witnessed a corresponding increase in The demand

from the OEM segment is aits sales figures.

3) Automobile sales derived one and directly correlated to the level of automotive

production. The recent Slowdown in automotive industry and global economic in general

negatively impacted the Indian tyre industry in 2009. The industry growth was only 2.19%

during first nine months of FY09, compared to 7.38% growth experienced during the same

period last year

4) Exports market brought about by the recession, most India tyre manufacturers have taken

to exports to reduce inventory build-ups. Indian companies have currently entered into

sourcing agreements (for tyres) with neighbouring countries like There is a trend of

increasing exports of bus and truck Sri Lanka and China. tyres (crossply variety) from India

to developing countries. This is because of the fact that developing countries are unable tosource them from developed The product focus of tyre countries as these are no more

produced there. exports from India has been Traditional Truck Tyres. Globally this segment

of tyre export is shrinking due to greater acceptance of radial tyres. Moving towards

radialization will be vital if tyre producers want to protect their share in international markets.

MAJOR CONCERNS OF INDIAN TYRE INDUSTRY RADIALIZATION:

Indian Tyre Industry hitherto is predominantly a cross ply/bias tyre manufacturing industry,

particularly in the commercial vehicle segment (truck, bus, LCV) whereas in the developed

countries radialization level is much higher. In comparison to normal (Bias) tyres, Radial

tyres offer higher life/mileage, lower fuel consumption, improved safety and ride quality andseveral other However, the initial cost of a radial tyre is approx. 25% higher benefits. though

on a cost per kilometer (CPK) basis, radial tyre gives higher benefits.

Though radial tyres offer Radialization (contd..) multiple benefits, low level of radialization

in the truck and bus segment is mainly due to higher initial cost (with limited demand pull),

low level of With an fitment by OEs on commercial vehicles and poor road conditions.

improvement in road infrastructure, radialization in the commercial vehicle (CV) increase in

fitment by the OEs (as segment needs an added thrust by way of: increased demand for

fitment of in the case of passenger car tyres) commercial vehicle radials in the replacement

markets.

While poor road Road and support infrastructure conditions have a positive impact on

replacement demand, by reducing the life of the tyre, improved roads can act as a catalyst to


4/16

increased purchase and use of Also, poor road and personal vehicles, thus driving up the

demand for tyres. support infrastructure act as a barrier to radialisation in the commercial

vehicle segment.

TUBELESS TYRES IN INDIA

Account for only 10% of passenger car tyre sales much better safety Primarily affected by:

a) Poor roads leading to rim damage

b) Lack of automatic machines for mounting and un- mounting

c) Poor quality service leading to leakages and poor life

OVER DEPENDENCE ON THE COMMERCIAL VEHICLE SEGMENT

India- 81% of Globally-Passenger transport accounts for 33% of product mix Low radial

tyre market is for commercial vehicles EXPORT ISSUES production capability hampersexport potential

Indian tyre industry is facing intense COMPETITION competition from China and other

South East Asian countries in tyre exports to Though the quality of Indian tyres is better and

has wider other countries. acceptance, due to cheaper pricing, higher volumes and aided by

Government support and subsidies, Chinese tyres are cutting into the share of Indian tyre

There is a need to promote India Brand for tyres as one which spells exports. quality and

higher standards.

Developed and industrialized countries are USED TYRES facing a monumental problem in

disposal of used tyres. Hence, developing and high tyre consumption countries like India arebeing looked upon as a dumping Several countries have banned or imposed severe ground

for used tyres. restriction on import of used tyres. In India, Government introduced floor

price (for assessment of Customs Duty) in 1997. Till recently, floor price mechanism

However, of late, the volume of used was effective in restricting imports. tyre imports (in

circumvention) of the floor price has increased significantly.

Several Non-Tariff Barriers (NTBs) on Indian Tyres countries have imposed Non-tariff

barriers, by way of standards, specifications and quality markings, which Indian tyres have to

comply with when exported to These stipulations are by way of Non-tariff barriers and are

those countries. Since the conditions imposed coming in the way of improved export

performance. are in a WTO compatible manner, there is a need to initiate simplification andcurb duplication at Government-to-Government level.

BANGKOK AGREEMENT/RTA- INCLUSION OF RAW-MATERIALS OF TYRE Under

the Bangkok Agreement, tyres can be imported at 5% concession INDUSTRY South Korea

in import duty (i.e. 15% customs duty vs. 20% normal duty rate). and China are signatories

of the Bangkok Agreement. Tyre imports from these two countries at concessional rate of

customs duty are a matter a serious concern Preferential tariff treatment has resulted in

import for Indian tyre industry. of large volume of passenger car radial tyres into India from

South Korea and However, since major raw-materials of tyres are truck/bus tyres from

China. not included in the Bangkok Agreement (eligible for concessional rate of customs

tariff from signatory countries) tyre industry is at a disadvantage and is faced with inverted

duty structure.


5/16

Incidence of Government policies TAXATION RELATED: excise duty on tyres continues

to be high @ 24%, the same as on luxury products In addition there are several local taxes

and like air-conditioners etc. levies imposed on tyres. Ultimate burden of high taxes falls on

the consumer. Apart from high Excise Duty, various embedded taxes (viz. Sales Tax, Octroi,

Cess etc.) take the total tax incidence on tyres to an even higher level. Truck and Bus tyres

are used in vehicles for transportation of common man and goods.

In Embossing of Maximum Price (MRP) on Truck/Bus Tyres February, 1988, as per a

directive of the Ministry of Industry, Embossing of MRP This was based on the

recommendations of on truck and bus tyres was started. the Committee on Tyre Industry

(1984, known as Satyapal Committee). In the last over 15 years, the economic scenario has

undergone a sea change with Tyre liberalization, removal of controls and free global trade in

most items. Industry is also delicensed. Major raw-materials of tyre industry (Natural In

Rubber and petroleum based materials) undergo wide fluctuations in prices. such a dynamic

scenario, it is a not practical to emboss the price on tyres due to market dynamics.

Submission - Tyre industry feels that there is no need to continue with embossing MRP on

truck/ bus tyres.

All large tyre companies Automotive Industry Standards In had voluntarily taken BIS

(Bureau of Indian Standards) certification. addition, Government has proposed Automotive

Industry Standards (AIS) which are Tyre essentially safety standards and applicable to tyre

industry also. Industry is of the view that there should be a unified national standard which

can be achieved with a merger of AIS standards with BIS.

The tyre industry in India has New Policy Initiatives had to grapple with raw material price

volatility, rupee appreciation and cheap In this connection, some of the recent initiatives by

the Chinese imports. No WTO bound rates government to facilitate the growth of the sector

include: No res for Tyres and Tubes trictions on the import of all raw materials required for

tyre manufacture except carbon black, which has been placed in the Increasing thrust ondevelopment of road infrastructure restricted list

Original Segments of Tyre industry Markets Design

Flatless Tyres- Exports Replacement Demand Equipment Manufacturers (OEMs)

Tubeless Tyres-Drill holes through the tyre and still ride the vehicle

Radial Tyres- Dual steel belt with Airtight seal between the tyre and rim

Cross Ply- The reinforcement runs criss cross on the sidewall stiff treads

Tyre Industry Passenger vehicles Commercial vehicles Others MHCV HCV LCV Farm

vehicles OTR Industrial vehicles Cars Motor Cycles Scooters Segments according to vehicle

categories

Demand for tyres Type: Bus and Truck; Scooter; Motorcycle; Passenger Car; Tractor Market:

OEM; Replacement; Export 62% 24% 14% Sales Segments Replacement OEM's Exports

65% 21% 2% 7% 5% Category Wise Truck/Bus Passenger Car Jeep LCV Tractor


6/16

OVERVIEW OF INDUSTRY

Tyre demand to revive by ~8-10% supported by the replacement tyre growth engineThe OEM segment in the domestic tyre industry reported around ~2% volume growth in aggregate during

2012-13, as volume declines in Truck and Bus (T&B) segment (-23%) and the tractor segment (-3%) was

offset by growth in LCV (~11%), relatively modest growth in high volume segment like passenger vehicles

(PV, ~4%) and flat Motorcycle volumes. On the other hand, the trends in the replacement segment werequite different, with healthy volume growth in T&B segment and weak volumes in two-wheeler (2W)

segment.

Overall the Indian Tyre Industry domestic demand is estimated to have posted flat to marginal volume

de-growth (0% to -1%) during 2012-13. However in terms of tonnagethe industry growth was

supported by strong replacement demand in high tonnage contributing segments like T&B and PV

leading to an estimated growth of ~ 4.5-5% during 2012-13. This, coupled with marginal improvement in

realisations has resulted in ~8-9% growth in revenues for the industry.

During 2013-14, ICRA expects the OEM tyre demand (volumes) to grow by a muted ~2% while the

replacement demand (volumes) is expected to be much stronger at 15% supported by growth in high

volume segments like 2W. However tonnage growth during 2013-14 is expected at ~5-6% only, driven byrelatively slower growth in T&B replacements.

Update on quarterly trendThe industry witnessed robust revenue CAGR of 21% during the period 2008-2012. The demand from the

OEM segment however moderated substantially during 2012-13. However, strong growth in replacement

tonnages, coupled with product mix of tyres improvements supported a moderate industry-wide growth

of 4.7% (in tonnage) for 2012-13. This was despite a relatively weak Q4 2012-13, where revenues grew by

~2% only, in line with the ongoing weakness in the domestic auto markets. The silver lining, however, was

in the continued margin expansion at the operating (60bps) and net levels (140bps) on the back of benign

rubber prices and easing of interest burden with cash accruals supporting debt retirement.

In Q1, 2013-14 too, while demand growth from OEM segment remained muted, operating and net

margins are estimated to have held ground at over 12.0% and 5.5% respectively supported by lower

global rubber prices and replacement demand.

Benign rubber prices supported industry wide margin expansion of over 200 bpsduring 2012-13. However flat margins expected for 2013-14 supported by a strongH1; margins may moderate in H2 with volatility in crude and NR. Strong high marginreplacement tyre demand a positive

Rubber prices, after having peaked at Rs. 240 per kg in April 2011, trended down to Rs. 160-170 kg during

2012-13. With bulk of the 2012-13 revenues coming from replacement volumes (segment enjoying

relatively high profitability), domestic tyre manufacturers were able to hold on to prices for a large part

of the year, leading to an industry wide margin expansion of over 200 bps during 2012-13.

ICRA expects the industry to benefit from lower priced raw material contracted during H1, 2013-14 to

support margins. Coupled with healthy replacement demand volumes we expect industry wide margins

to hold at 2012-13 levels, despite any firming in NR and crude prices during H2, 2013-14. Slowing pace of

debt funded capacity additions and relatively lower depreciation are also expected to support net

margins.


7/16

Pace of capacity additions expected to continues; albeit at a moderately lower levelon the back of recent large capacity additions

Over the last few fiscals, the domestic tyre industry has been gearing up for the imminent structural

change in the T&B segment with cross ply tyres giving way to the technically superior radial tyres.

Between March 2009 and March 2012, the industry is estimated to have added 62.4 million tyres

capacity, reflecting a CAGR of 16%, in order to bridge the demand gap. Although the current subdued

demand outlook would warrant some moderation in capacity addition, tyre manufacturers are unlikely todefer capex materially at this stage of their expansion. Overall, over the last four years, domestic tyre

majors have incurred over Rs. 120 billion capex, resulting in increased interest and depreciation burden.

The industry-wide leverage, which has been on an uptrend over last several years, however moderated

(from 1.4x to 1.2x) during 2012-13, supported by healthy cash accruals.

Keeping in mind the eventual permeation of radial tyres, tyre manufacturers (both domestic and

international) have committed substantial amount of investments (Rs. 51.5 billion) between CY13 and

CY15 towards addition of ~13.2 million tyres, primarily in the radial space.

Imports from China on the decline

After witnessing CAGR of 19% in import growth, tyre imports, especially from China, have declined

considerably in the last two fiscals. This is on the back of reduction in export subsidies and increasing cost

inflation in China leading to erosion of price competitiveness of Chinese tyres and significant rupee

depreciation narrowing the price differential between imported and domestic tyres. The ramp up of

domestic TBR capacities backed by massive domestic investments and slowdown in the domestic T&B

OEM market (major segment for imported TBRs) have also supported the moderation in TBR imports.

Apollo-Cooper acquisition; risky bet that could reap rich dividends in the long run

On June 12, 2013, Apollo Tyres Limited announced its proposed acquisition of USA based Cooper Tire &

Rubber Company, in an all cash deal totalling USD 2.5 billion (~Rs. 14,50015,000 crore). The acquisition,

once concluded, will make Apollo Group the 7th largest tyre manufacturer globally.

While this large sized acquisition is based on leverage and consequently strains the balance sheet, in the

longer term there could be potential for significant gains from potential synergy between the two

entities.


8/16

MAJOR PLAYER AND STUCTURA OF INDIA


9/16

PRODUCT APPLICTION

1.

Tyre with Cotton (reinforcement) Carcass :

In the starting phase of proper Bias or Cross ply tyre, cotton plies were used as mainreinforcing material (end of 19th and early 20th Century). Cotton reinforcing material hadinherent problems of low strength and high moisture regainer. Leading to large number of pliesto get the requisite casing strength for the tyre weight of the tyre and poor heat dissipation.This, in turn, gave an adverse impact on Tyre weight and buck rendering poor performance.

2. Tyre with Rayon (reinforcement) Carcass :

With the development of viscose and rayon the strength of reinforcing material went up andfound application in tyres in early 20th Century. Due to higher strength of rayon it was possibleto reduce number of plies and weight of the tyre. Since less number of plies were needed to

match cotton strength, concept of ply rating developed. It was also possible to have higher plyratings now.


10/16

3. Tyre with Nylon (reinforcement) Carcass :

Persuent to development and introduction of Polymide (Nylon) the strength and flexingbehavior of reinforcing materials improved substantially resulting in further reduction of numberof plies, consequently the weight of the tyres. This development substantially improved theheat and impact resistance of the carcass leading to better tyre performance and higherdurability. Nylon casing gave a boost to retreadability. Thus effective cost of the tyre inoperation became much more economical.

Development of Tyre Technology due to change in Reinforcing material is basically in the caseof Cross Ply or Bias Tyres. Bias tyre has cotton, Rayon or Nylon Cords, bound as plies andeach ply (i.e. Cords) cross each other at a definite angle anchoring at the bead.

4. Radial (Construction) Tyre - Textile/Textile belt (Rayon/Nylon/Polyester) :

Inspite of continuos development in Bias Tyre Technology, inherent problem of high heatdevelopment and poor life remains a continuos challenge.In early 1950s new concept of Tyre design was developed namely "RADIAL" wherein plieswere made highly flexible by keeping the cords at 90 and in order to improve tyre life,inextensible (stiff) belts were placed on the top of the Carcass under the tread. This led tostiffer tread portion, leading to higher Tread life (Mileage) and much more comfortable ride dueto flexible carcass. This was the beginning of 'Revolution' in tyre technology.

Initially Radial tyres were introduced with Casing Plies as well as belt material of textiles.Continuos development in Radial Concept led to further improvements as explainedbelow.

5.

Radial (Construction) Tyre - Textile/Steel belts :

Once Steel Tyre cord got developed it found its immediate application in Belt material, keepingcasing plies of Textile, to further improve durability.

6.

Radial (Construction) Tyre - Textile/Glass Fibre Belt :

Similarly, development of glass fibre which is practically inextensible, led to application in

passenger and Light Commercial Vehicle tyres with Textile Casing, providing corrosion freeradial Tyre belt material.

7. Low Aspect Ratio (Cross Ply or Bias) Tyre :

A new concept of low aspect ratio (ratio between section height and section width) of the tyrein cross ply construction was introduced for higher speed and better performance.

8. Tubeless Tyre (Cross Ply) :

Concept of tubeless tyre in cross ply construction wherein an inner liner compound based onchlorobutyl or Halo Butyl which is impermeable to gases, was introduced eliminating the usageof tubes. This concept could not find sustained application in India due to bad roads and poor

handling/maintenance of Rims other than in OTR range. However, Tubeless tyres areproduced for Export Market.Gradually this concept will become fully acceptable with the advent of new generation vehiclesand improved service facilities.

9. Radial (Construction) Tyre - Textile/Aramid Belt :

Due to poor roads and inadequate vehicle maintenance, Steel belts had corrosion problemdue to cuts and chips in the tread. This led to trials with Aramid belt (Textile material with veryhigh strength and Low extensibility).However, this could not find any sustained use.

10.

Radial (Construction) Tyre - All Steel :

In developed countries, Radial Truck/Bus tyres use steel wires in casing as well as in Belts toachieve the optimum advantage of radial construction. In India also this construction was tried


11/16


12/16

2. SAFETY STANDARD

In line with the Safety Standards for tyres in some of the developed countries, Government of India

decided to formulate AUTOMOTIVE INDUSTRY STANDARDS (AIS) which would be mandatory in

nature.

Government of India also decided to merge AIS with BIS. Cuurently, there is a unified standard for

tyres of Commercial Vehicles (Bias and Radial), Passenger Cars/Jeeps (Bias and Radial) and Two-

Three wheeler tyres. At present AIS/BIS standards are not evolved/notified for other categories of

tyres, viz. tractor/farm, industrial, OTR etc.

The merged Standard, expected to be published in the near future for mandatory application, would

be applicable to all tyres produced domestically and imported. However, as exported tyres are

subject to the standards of importing countries, the above Standard would not be mandatory on tyres

exported from India.


13/16

TECNOLOGY INVOLVE

Technology generation in the Indian tyre industry has witnessed a fair amount of expertise

and versatility to absorb, adapt and modify international technology to suit Indian conditions.

This is reflected in the swift technology progression from cotton (reinforcement) carcass to

high-performance radial tyres in a span of four decades. Globalization has led to the linking

of the economies of all the nations and therefore major Indian players in the tyre industry are

pursuing global strategies to enhance their competitiveness in world markets. The present

section broadly undertakes an overview of the Indian tyre industry through an examination of

its growth trends with respect to production, exports and acquisition of technological

capabilities.

Technology generation in the Indian tyre industry is essentially geared to development

research, involving the change of tread design, reinforcement material etc. Most of the major

players do not engage in basic research due to the high costs involved. The source of

technology for the domestic firms has been through reverse engineering, joint ventures andcollaborations. The emphasis given by Indian tyre companies to applied research and the

setting up of well-equipped in-house R&D centers by the companies, which are manned by

experts and experienced professionals, have also helped in technology up gradation. Indian

tyre technology has exhibited versatility in maintaining inflow of technology through foreign

collaborations and tailoring the same to Indian needs. R&D is essentially business or market

driven. However, raw material suppliers could also help in conceiving new projects.

Compound development and in-process problems have been the main thrust of in-house R&D

in the Indian tyre industry.

Expenditure on Imported Technology and R&D Intensity: Comparison between Top TenFirms and All Other Companies in the Tyre industry Comparison of expenditure on imported

technology (at current prices) and R&D intensity among top ten players and all remaining

firms (spectral aggregate) in the Indian tyre sector. Note: The primary vertical axis depicts

expenditure on imported technology (at current prices) in Rs (crores), while the secondary

vertical axis depicts R&D intensity (in percentages).Source: CMIE database

Tyre technology up gradation is an extremely difficult process, particularly in the Indian

scenario, due to several factors. First, since tyre technology encompasses various disciplines

such as polymer, chemical, steel etc. compromises have to be made in the up gradation of

technology because of the conflict and complimentarily inherent in these disciplines, theusage pattern of the tyres and the cost factor. Further, a tyres performance could be affected

due to factors such as the weather, loading pattern etc. Despite these bottlenecks technology

up gradation in Indian tyre industry during the last few decades has been significant. This has

been possible to some extent due to government approvals of collaborations with MNCs in

this sector. The emphasis given by Indian tyre companies to applied research, the setting up

of well-equipped in house R&D centers by large tyre companies, manned by experts and

experienced professionals have also helped in technology up gradation. Indian tyre

technology has exhibited versatility in maintaining inflow of technology through foreign

collaborations and tailoring the same to Indian needs. Automation Tyre production

traditionally, is multi-stage, with significant inter-stage difference seen the intensity of labor

requirement, and a highly complex process involving these of around 37 different materialsincluding rubber, steel, fabrics and vulcanizing materials. The production system in the

Indian tyre industry has been traditionally very labor intensive. The automation of


14/16

manufacturing processes has increased gradually, which has slashed the size of the workforce

to a considerable degree and has effected a change in its composition. The degree of

automation has been greater in the area of radial technology, while cross ply technology is

still labor intensive. The firms have been resorting to automation in order to tackle problems

related to labor unionization and indiscipline in the sector.

The rationale provided by the firms for the increasing drive towards automation of the

manufacturing facilities has been that high quality and uniformity of the final product usually

cannot be guaranteed with a labor intensive process. New Policy Initiatives The tyre industry

in India has had to grapple with raw material price volatility, rupee appreciation and cheap

Chinese imports. In this connection, some of there cent initiatives by the government to

facilitate the growth No WTO bound rates for Tyres and of the sector include: No

restrictions on the import of all raw materials required for Tubes tyre manufacture except

carbon black, which has been placed in the restricted Increasing thrust on development of

road infrastructure Future prospects of list the Indian Tyre industry The Indian Tyre industry

is expected to show a healthy growth rate of 9-10% over the next five years, according to a

study by Credit Analysis and Research Limited(CARE). While the truck and bus tyres are set

to register a compounded annual growth rate (CAGR) of 8%, the light commercial vehicles(LCV) segment is expected to show a CAGR of about 14 %. However, we have to also take

account of the effect of the global recession on the sector in making these assessments. The

growth of the sector is closely linked to the expansion plans of the automobile companies, the

governments thrust on development of road infrastructure and thesourcing of auto parts by

the global Original Equipment Manufacturers (OEMs).Some significant hurdles towards

attaining these projected growth rates could be raw material related price volatility, rupee

appreciation and the looming threat of cheap Chinese imports. The Indian tyre companies

need to make active efforts to explore newer markets as the existing markets for bus-truck

tyres,

which account for about 45 % of the total export volume, is nearing saturation. There is alsoan urgent need to increase the degree of radialization in order to safeguard their share in the

export market. Global tyre manufacturers have been making constant efforts to innovate and

offer a diverse range of products such as tyres with pressure warning systems, run flat tyres,

eco-friendly tyres and energy efficient tyres. In this context, the Indian domestic companies

have to pursue a growth strategy of continuous innovation and technology.


15/16

CHEPTER-2

INTERNATIONAL OF SCENARIO


16/16

INDUSTRY AT INTERNATIONAL LEVEL

project on tyar industry

Documents