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Demand & Supply Scenario of Tyre industry in India

Demand side – 

1)OEM Market, 2.)Replacement Market & 3)Export

Tyre demand contracted the most in the commercial segments like Trucks & Bus (T&B) (-17%), LCVs (-8%) and Tractors (-18%) in FY20. Consumer segments like PVs and 2Ws were relatively resilient. Tyre demand from OEMs declined by 16.3% in FY20 vs. a 2.7% decline in the replacement segment. The product mix has shifted towards the replacement (57%) segment vs. OEM (43%) in the last 4 years.

1) OEM Production Trends – 

 

Source – SIAM

Tyre Demand cycle follows CV Cycle –

Source – Edelweiss on Tyre Industry, Page no – 6

Source – Edelweiss on Tyre Industry, Page no – 5

Source – Economics Times

2) Replacement Demand

Source – Nirmal Bang, Page no – 5

3)Exports 

Source – Nirmal Bang, Page no – 15 & 16

Supply side –

1)Price of raw materials –

Source – Nirmal Bang, Page no – 17

2) Production volume of Natural rubber in India for FY06-FY20

3)Consumption volume of Natural rubber in India for FY06-FY20

Source – Statista 

Source – Nirmal Bang, Page no – 4 & 5

4) CAPEX in the industry

Industry has witnessed significant capacity expansion over last 5 years while the industry has seen low demand led to lower capacity utilisation level. Shift towards radial tyres in the MHCV segment was also one of the reasons that drove higher capex. Bias Tyres capacities to that extent were not usable, which also affected the utilization levels.

Source – Edelweiss on Tyre Industry, Page no – 11

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