Tyre production witnesses a drop

The domestic tyre production in some of the key segments has contracted in the current fiscal even as a growth is being witnessed in commercial and passenger vehicle segments.

The latest data released by Automotive Tyre Manufactures’ Association revealed that the tyre production for both Medium & Heavy Commercial Vehicle (M&HCV) and Light Commercial Vehicle (LCV) has witnessed a drop in the April-Sept’15 period.

Notwithstanding resurgence in production and sales of M&HCVs during the current fiscal, the domestic production of M&HCV tyres is down. In view of the fact that M&HCV segment accounts for 55 per cent of the tyre industry revenues, the de-growth in heavy commercial vehicle tyre segment has hit the industry hard, Raghupati Singhania, Chairman ATMA said.

The M&HCV tyre production, which was up by 4 per cent in FY-15, is down by 2 per cent in FY-16 (Apr-Sep) against year ago period. Similarly the LCV tyre production which was up by 9 per cent in FY-15 is down by a steeper 14 per cent in FY-16 (Apr-Sept).

Passenger car tyres too are showing only muted growth in production while passenger car sales volumes are rising at a healthy clip. The Apr-Sept period of FY-16 registered a growth of 7 per cent in passenger car tyres against 13 per cent growth witnessed in the previous fiscal (FY-15).

Tractor front and tractor rear tyres have also seen a drop in production of 9 per cent and 11 per cent respectively during the current fiscal in view of stressed rural demand.

Not only production is down, tyre export scenario is also downbeat. Tyre exports which have grown at a CAGR of 21 per cent in the last 10 years have petered out during the current fiscal. Exports of M&HCV tyres have dropped by 9 per cent in the Apr-Sept’15 against year-ago period. The fall in exports of passenger car tyres has been much higher at 22 per cent.