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Industry overview

$85.0 billion industry globally. Indian industry worth $3 billion (4%). Tyre off take@ 6.9%over the past 5 years. Projected CAGR of 8.9% over the next 5 years.

Indian Tyre Industry Overview:


Financial Year 2009-2010 (Est.) Turnover of Indian Tyre Industry Tyre Production (Tonnage) Tyre Production All Categories (Nos.) Tyre Export from India (Value) : Number of tyre companies: Industry Concentration Radialisation Level - Current (as a % of total tyre production)

Rs. 25,000 Crores 13.50 lakh M.T. 971 Lakh Rs. 3625 crores 36 10 Large tyre companies account for over 95% of total tyre production. Passenger Car tyres: 98% Light Commercial Vehicles: 18% Heavy Vehicles ( Truck & Bus ): 12%

Government Policies and Duties:


Tyre Industry Delicenced since 1987 Export (of tyres and tubes) Freely allowed Import (of new tyres and tubes) Freely allowed. Import Policy for Used / Retreaded tyres: Restricted from April, 2006

TOTAL TYRE PRODUCTION IN INDIA


*(In 000 Nos)

CATEGORY 2003 - 04 2004 - 05 Truck & Bus 10821 11092 Passenger Car 9959 11862 Jeep 1440 1462 Light Comml. 3271 3945 Veh. (L.C.V.) Tractor Front 1148 1311 Tractor Rear 842 1096 Tractor Trailer 415 408 A.D.V. 295 197 Scooter 9274 9992 Motor Cycle 16688 18127 Moped 168 124 Industrial 295 377 O.T.R. 74 89 Aero 0 0 TOTAL 54690 60082

2005 - 06 11941 13605 1272 4529 1383 1134 596 325 9519 21053 55 514 106 0 66032

2006 - 07 12367 14264 1368 4820 1754 1296 823 381 9643 26079 0* 635 115 0 73545

2007 - 08 2008 - 09 2009 - 10 13137 12839 14811 16437 16571 20047 1467 1469 1402 5320 1814 1234 886 409 11604 27921 0* 733 141 0 81103 5298 1842 1315 758 281 10882 30148 0 568 136 0 82107 5739 2386 1634 903 294 13558 35664 0 538 161 0 97137

Categorywise Tyre Production in India:

Financial Year 2009-10 - 2010-11 ( April-September)


In Lacs

Tyres for: Truck & Bus Passenger Car Jeep Light Commercial Vehicle Tractor Front Tractor Rear Tractor Trailer Animal Drawn Vehicle Scooter / Moped Motor Cycle Industrial Off the Road (OTR) Total

2009-10 72.79 88.84 6.42 27.91 11.43 8.20 4.25 1.17 57.75 164.37 2.48 0.73 446.34

2010-11 76.08 125.46 7.63 28.40 13.88 9.18 4.64 1.30 91.61 209.91 3.0 0.91 572.0

% Change 5 41 19 2 21 12 9 11 59 28 21 25 28

Categorywise Tyre Exports -2002-03 to 2009-10:


CATEGORY Truck & Bus Passenger Car Jeep Light Commercial Vehicle Tractor Front Tractor Rear Tractor Trailer Motor Cycle ADV Scooter Implements Industrial OTR Antique TOTAL 2141438 223155 2503956 2408759 2276049 2431545 364514 591494 1024561 1052874 966046 1091715 20 220 391 885 1420 7461 700868 962972 1130908 1390814 1599230 1621880 20698 18990 18202 13408 11078 17072 72263 89758 84684 98807 56186 66644 852 1448 3686 3833 8665 17468 34088 47333 62710 84908 151677 322630 20 0 0 0 0 30 49966 120725 202656 289984 320536 45338 9143 6558 2096 2447 4045 5637 20716 10702 9885 7303 11543 12777 29079 21168 23375 33480 43085 45919 0 0 0 0 0 0 3443665 4102923 5067038 5387502 5449560 6094116 1933959 991558 10263 1630483 13051 46347 20067 453226 0 435778 9962 7605 36774 0 5589043

[ Nos.]

2002 -03 2003 -04 2004 -05 2005 06 2006 - 07 2007 -08 2008 - 09 2009 - 10 2052946 845688 6946 1465991 12052 46206 4692 362784 0 441965 15693 8002 35515 0 5298480

Historical and projected growth rate:


Category wise historical and forecasted demand

Tyre supplies are broadly to the following segments:


Replacement Market (aftermarket) Original Equipment Manufacturers (OEMs), i.e. vehicle manufacturers Export State Transport Undertakings (STUs) (primarily for Bus tyres)Government Purchases

Outlook on Demand & Supply:India


Drivers of demand -Industrial & freight activity -Personal purchasing power -Economic growth Three avenues of demand - Original Equipment-40% - Replacement Demand-53% - Export Demand-7% Supply can be met by domestic players

Face competition from imported tyres

Market drivers :India


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:India
Tubeless tyres in India Good puncture resistance and much better safety account for only 10% of passenger car tyre sales Primarily affected by a) Poor roads leading to rim damage b) Lack of automatic machines for mounting and unmounting c) Poor quality service leading to leakages and poor life 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

Scope and challenges:

Industry poised for a very good growth rate More J.Vs 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. Increasing productivity both labour and machinery Competition from other developing markets Increasing raw material costs will effect OPM