Indian Tyremakers to Spend £670 million
According to India’s Economic Times, tyre companies in the subcontinent plant to invest around £670 million in their operations over the next two or three years. The financial daily reports that this sizable sum will be spent by a number of players including MRF, JK Tyre, Apollo, BKT, Ceat, Birla and Bridgestone. Birla alone is reportedly spending £120 million, while Ceat is said to be making investments worth £97 million and JK Tyre £45 million.
Such a large investment is expected to increase industry turnover from its current £2.3 billion up to £3.9 billion, and much of the increase may come from the production of TBR tyres. While radialisation in the passenger car sector has reached over 95 per cent in India, TBR market penetration remains a paltry 2 to 3 per cent.
The three main reasons behind the limited adoption of radials in India’s commercial vehicle sector to date are the massive investment needed to established TBR production, poor quality roads and the tendency of operators to overload vehicles – a practice that is particularly detrimental to the performance of radial tyres. However, as JK Tyre vice-president A S Mehta points out, “with [the] road network improving in the next five years we can see the radialisation for the commercial segment increase from the current 2-3 per cent to 15 per cent and 40 per cent in the next 10-13 years.”