As the domestic demand for tyres remains subdued due to economic slowdown, leading tyre-makers including JK tyres and Apollo Tyres are focusing on international markets to improve their sales by expanding their businesses overseas.
According to data from industry body Automotive Tyre Manufacturers Association (ATMA), tyre exports from India has increased by 12% on year-over-year (YoY) in terms of volume in April-August 2019-20, even as the domestic demand remains subdued.
“Slowdown is certainly impacting the demand as production has gone down. So far, export business is contributing about 8% of the revenue and we are aiming to increase this share to about 16%in the next two to three years. We have been assiduously developing and expanding portfolio purely as per foreign market needs and not just because of slowdown impact,” said Satish Sharma, President, Asia Pacific, Middle East & Africa (APMEA), Apollo Tyres Ltd.
He added that the focus of the company will be doubling its exports revenue mainly in Thailand, Malaysia and the South African market. The company has recently acquired 3% market share in Thailand and employed around 100 people outside India to look after the needs of the sales of the company’s prime export pockets.
The ATMA figures reveal that almost all segments of tyres have shown increase in exports from April to August period, with passenger vehicle tyre exports up by 8%, medium and heavy commercial vehicles up 17%, motorcycles tyre exports up by 30%, scooter’s tyre up by 20% and three-wheelers tyre exports up by 16%.
Even JK Tyres is banking on exports, mainly to the Mexican market, which has seen its Mexican business EBITDA rose by 18% on a quarter on the Quarter basis to `170 million. Management expects the Mexican business to improve further. The company is exploring opportunities in the US and the European market.
Even Ceat Tyres, promoted by the RPG group, which has already strengthened its presence in the Middle East and African market is now focusing on Europe and the US market.