External Analysis: Overview Of The Indian Tyre Industry

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External Analysis TVS Tyres

Tyre Industry

Contents
Overview of Indian Tyre Industry 3
Segmentation 4
Industry Analysis 6
COMPLEMENTORS AND NON-MARKET FORCES 9
Industry trends 11
Industry Composition 12
Strategic implications 14
Way Ahead 15

Overview of Indian Tyre Industry
The origin of the Indian Tyre Industry was marked by Dunlop rubber limited when it set up its first tyre plant in 1926 in West Bengal. This was followed by MRF in 1946 providing India its second tyre manufacturer. Since then, the Indian tyre industry has grown rapidly. The size of Indian tyre industry now is around Rs. 376 billion. The industry has grown at CAGR 12.8% driven by robust growth in Indian automobile industry. There are around 40 …show more content…

Commercial Vehicle tyres (medium and heavy commercial vehicles, light commercial vehicles, tractors)
2. Passenger Vehicle tyres (passenger cars and MUVs, motorcycles, scooters)
3. Others (off-the-road, industrial, farm vehicles)
Commercial vehicles constitute around 67% of the total industry whereas the two-wheeler and the four-wheeler industry represent 12% of the industry respectively. The rest is represented by the industrial and the farm vehicles.
TVS tyre is present in all the three categories producing tyre for tractors, farm vehicles, agro vehicles, light trucks, three wheelers and motorcycle. The major focus of the firm is on the passenger vehicle tyres (mainly two-wheelers). The company currently caters to domestic after-market with a network of over 2,400 dealers and 34 depots. On the basis of market- tyre industry can be classified into three categories:
1. original equipment manufacturers (OEMs)
2. replacement
3. …show more content…

The two kinds of raw materials are:
Natural Rubber
• International natural rubber prices to decline as production outpaces supply
• Sale of natural rubber stockpiles increased supply; production cuts to restrict further price decline
• Availability of cheap imports to result in further decline in domestic NR prices
• Domestic natural rubber demand to continue to outpace production and hence domestic prices are expected to fall at a slower rate
Other crude based raw materials
• Decline in carbon black prices, with fall in feedstock prices
• NTCF prices to dip with decrease in caprolactam prices
• Synthetic rubber prices continue to decline
Demand side forces
• Replacement tyre demand to improve because of better economic activity and replacement cycle approaching for the vehicles sold 3-4 years back
• Sales of MHCV, passenger car and two wheelers to improve based on economic growth rate and consumer sentiments, which will result in an increase in OEM tyre demand
• Capacity additions by major players to increase radial tyres supply
• Tyre imports to grow because of huge demand of radial tyres and a few Chinese manufacturers getting the BIS

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