Indian tyre manufacturing companies are expected to see a rise in sales in the coming fiscal year 2013 even though there is a decline in export growth. Domestic growth of the industry has been recorded at a modest 8%. A moderate demand slowdown and decline in prices of rubber have led to the increase in tyre prices. These increases in tyre prices are quite low and have been recorded at 4.5% for Q4FY2012.
The operating margins of these tyre companies are lower considering the changes in the prices of cost/selling price. Demand for automobile tyres is increasing, but with fluctuating prices of raw materials increase in growth can't be seen as of now. Rates of tyres for heavy vehicles and buses are higher than those of passenger vehicles. This difference in price is due to exports of tyres for passengers vehicles. Demands for tyres by major sectors are classified as follows, OEM's 47%, replacement 47%, and exports 6%.
Demand for tyres has seen a drastic slowdown in 2012 due to lower demand growth for tyres original equipment manufacturers (OEMs)/automotive manufacturers. There are 43 Indian tyre manufacturers of which only 10 of them constitute 90-92% of tyre production. Keeping this in mind, it should be noticed that the share of imports has been increasing at a steady rate due to demand by commercial vehicles, and passenger vehicles.
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