KOCHI: Domestic tyre production in some of the key segments has contracted during the current financial year. Tyre production for both Medium and Heavy Commercial Vehicle (M&HCV) and Light Commercial Vehicle (LCV) has witnessed a drop in the April-September 2015 period compared to the same period last year, according to the latest data released by Automotive Tyre Manufactures’ Association (ATMA).
“Notwithstanding resurgence in production and sales of Medium and Heavy Commercial Vehicle 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 revenue, the de-growth in Heavy Commercial Vehicle tyre segment has hit the industry hard”, said Raghupati Singhania, Chairman ATMA.
M&HCV tyre output that was up by 4 per cent in FY2014-15 is down by 2 per cent in April-Sept) against year ago period. Similarly LCV tyre output that was up by 9 per cent in 2014-15 is down by a steeper 14 per cent in 2015-16 (April-Sept).
Passenger car tyres segment saw a growth of 7 per cent in the same period against 13 per cent growth witnessed in the previous fiscal. Tractor Front and Tractor Rear tyres have also seen a drop in production of 9 and 11 per cent respectively during the current fiscal in view of stressed rural demand.
“The drop in production is being witnessed at a time as the investments lined up by the industry to the tune of `35,000 crore in the last few years is reaching its fruition. While production is down the manufacturing capacities are lying unutilised. A significant part of demand especially for truck and bus tyres is being met by cheaper imports from China,” ATMA said.
Besides, tyre exports from India, which had 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 April-Sept’15 against year-ago period. The fall in exports of passenger car tyres is at 22 per cent.
Imports have come to account for more than 30 per cent of the replacement market impacting domestic production, said Singhania.