This is the motto of tyre consumers in India as 3/4th of tyres sold in India are Indian!!!
Digest this: In this age of foreign brands and FDI, 74% of the Rs.190 billion Indian tyre industry is dominated by four big ‘homegrown’ players! ‘Homegrown’ is the word! Leading the race is MRF with a thumping market share of 22%. It is closely followed by Apollo Tyres, JK Tyres and Ceat (with a 21%, 18% and 13% market share). This is very unlike the complementary automobile industry where global names rule the roost. This however was not always the case. Till the late 1960s, players like Dunlop (UK), Firestone (USA) and Goodyear (USA) with vast R&D expertise dominated the tyre industry in India. However, protectionist policies of the government forced these MNCs to pull out, and that’s where the indigenous players struck hard. So will the international giants always remain ‘Also-rans’?
Well, at least when contrasted in the current scenario, it becomes obvious that the Indian tyre makers are not willing to loosen their grip on the roads! Even the targets & investments from the global giants appeared too conservative in a growing market as an auto analyst explains, “In their second stint, a lot of time the global tyre companies came to India with small targets and concentrated only on niche, high-end segment.” They clearly adopted a ‘go-slow’ strategy. Take Goodyear India for example, the third-largest tyre company in the world with a massive 17% global market share. Unbelievably, the same Goliath has a meager 6% market share in India! And now as a revival act, it plans to invest $20 million to expand capacity at its Aurangabad facility. Similarly, Bridgestone is mulling over setting up a truck & bus tyre manufacturing facility in India over the next 3 years with an estimated investment of $200 million. Clearly, they need to invest more...
Even the ‘technological’ superiority of internatinal players is fast diminishing as Indian players work hard ‘technologically’. Take Ceat for instance. It is scouting for a tie-up with Pirelli (Italy) in the truck & bus tyre category as Arnab Banerjee, VP–Marketing, Ceat, explains, “We are looking for a foreign partner and it is purely for the purpose of gaining the technological edge.” MRF too plans to expand its capacity with a capex of Rs.5 billion. However, there is a common challenge in the name of inflationary pressures on input costs in the auto & tyre industry, which is causing a slowdown in the industry. However, industry experts are positive about the future as Revati Kasture, Head, CARE Research, points out, “The tyre industry will register a growth of 9-10% in the next five years. The truck & bus and LCV tyre categories are expected to register a CAGR of 8% and 14% respectively.” Undoubtedly, there is a ‘goodyear’ awaiting for the Indian players. Hopefully it’ll bring smiles to global giants too.
Digest this: In this age of foreign brands and FDI, 74% of the Rs.190 billion Indian tyre industry is dominated by four big ‘homegrown’ players! ‘Homegrown’ is the word! Leading the race is MRF with a thumping market share of 22%. It is closely followed by Apollo Tyres, JK Tyres and Ceat (with a 21%, 18% and 13% market share). This is very unlike the complementary automobile industry where global names rule the roost. This however was not always the case. Till the late 1960s, players like Dunlop (UK), Firestone (USA) and Goodyear (USA) with vast R&D expertise dominated the tyre industry in India. However, protectionist policies of the government forced these MNCs to pull out, and that’s where the indigenous players struck hard. So will the international giants always remain ‘Also-rans’?
Well, at least when contrasted in the current scenario, it becomes obvious that the Indian tyre makers are not willing to loosen their grip on the roads! Even the targets & investments from the global giants appeared too conservative in a growing market as an auto analyst explains, “In their second stint, a lot of time the global tyre companies came to India with small targets and concentrated only on niche, high-end segment.” They clearly adopted a ‘go-slow’ strategy. Take Goodyear India for example, the third-largest tyre company in the world with a massive 17% global market share. Unbelievably, the same Goliath has a meager 6% market share in India! And now as a revival act, it plans to invest $20 million to expand capacity at its Aurangabad facility. Similarly, Bridgestone is mulling over setting up a truck & bus tyre manufacturing facility in India over the next 3 years with an estimated investment of $200 million. Clearly, they need to invest more...
Even the ‘technological’ superiority of internatinal players is fast diminishing as Indian players work hard ‘technologically’. Take Ceat for instance. It is scouting for a tie-up with Pirelli (Italy) in the truck & bus tyre category as Arnab Banerjee, VP–Marketing, Ceat, explains, “We are looking for a foreign partner and it is purely for the purpose of gaining the technological edge.” MRF too plans to expand its capacity with a capex of Rs.5 billion. However, there is a common challenge in the name of inflationary pressures on input costs in the auto & tyre industry, which is causing a slowdown in the industry. However, industry experts are positive about the future as Revati Kasture, Head, CARE Research, points out, “The tyre industry will register a growth of 9-10% in the next five years. The truck & bus and LCV tyre categories are expected to register a CAGR of 8% and 14% respectively.” Undoubtedly, there is a ‘goodyear’ awaiting for the Indian players. Hopefully it’ll bring smiles to global giants too.
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