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INDIAN TYRE INDUSTRY

“Industry well poised to ride the next growth wave in the auto industry”

A M Pradeep +91 44 4596 4312 arockia.pradeep@icraindia.com

Tyre Feature September 2014

INDIAN TYRE INDUSTRY

Industry well poised to ride the next growth wave in the auto industry SEPTEMBER 2014

Overview - Indian Tyre Industry Well Poised To Ride The Next Growth Wave In The Auto Industry All segments barring Light Commercial Vehicle (LCV) to post modest growth in 2014-15 following a relatively weak 2013-14

Contrary to general consumer expectations, the domestic automotive industry posted relatively muted growth of around 5% during 2013-14, with a protracted slow down in the Medium and Heavy Commercial (M&HCV) segment. While the Light Commercial (LCV) Segment managed to record a volume growth in 2012-13 supported by growth in the sub 3.5T segment, the overall economic scenario caught up with LCV demand during 2013-14, with the industry contracting by a sharp 14%. Passenger vehicles (PV) performance was weak during 2013-14, de-growing by 5% - marking the first instance of negative growth for the industry in over 12 years. Two-wheeler volumes grew by a modest 7%, with the high volume Motorcycle segment shows signs of demand distress even as the scooter volumes continued to maintain a stellar growth. Tractor demand was a silver lining for the industry with a healthy 18% growth supported by healthy monsoons. The Commercial Vehicle (CV) industry is now showing signs of recovery, especially in the medium & heavy duty truck segment, which is witnessing steady improvement in sales over the past four months. The recent trend in improvement in...