Is the Indian tyre industry going through a rough patch?
In recent years, the Rs 12,000 crore Indian tyre industry has seen major changes. The number of tyre makers has shrunk from 12 to six–and the top four companies account for about Rs 9,200 crore. The industry is being squeezed between rising production costs and cheap imports. High cost of raw material (naturalised rubber) and oil prices are serious threats: if they keep escalating, margins will come under pressure, which will severely impact smaller players. There is a likelihood of some companies turning sick, which could lead to a second round of consolidation–in line with the worldwide trend. For over a year now, the industry has been facing a steep and continuing escalation in natural rubber prices. This is the biggest issue we are grappling with, and a cause for extreme worry. It has pushed up the cost of production and the price that consumers pay. On the other hand, there’s the problem of cheap tyre imports. However it isn’t a big threat, primarily because the Indian customer ha
