Tyre production dips on slowdown in domestic market, overall exports up 18%

Against the backdrop of a slowdown in the domestic market, overall tyre production in the country has remained in the negative zone with a decline of around four per cent during Q1FY20 compared to the same period last year. 

Motorcycle tyre production, which weathered the slowdown successfully during FY19, is witnessing a decline in the current financial year, while passenger car tyre production continues to remain in the negative territory. However, the good news is that overall tyre exports went up by 18% in the Q1FY20.

According to  Automotive Tyre Manufacturers Association (ATMA), which accounts for over 90% of tyre production, overall production was 152.40 lakh units during April to June 2019 as against 159.19 lakh units, a year ago.

While the production of passenger car tyres reported a 7 per cent drop to 100.85 lakh units from 108.24 lakh units, the production of two-wheeler tyres dropped by 6 per cent to 57.25 lakh units from 60.03 lakh units. The production of truck and bus tyres remained flat or reported a one per cent growth to 51.68 lakh units from 51.38 lakh units.

As far as exports are concerned, overall tyre exports rose by 18 per cent to 28.29 lakh units from 24.03 lakh units, mainly led by truck and bus tyres, followed by passenger cars.

The exports of truck and bus tyres rose to 6.40 lakh units from 5.22 lakh units, while passenger car tyres clocked 16 per cent growth to 7.57 lakh units from 6.55 lakh units, a year ago.

Raw material

In another positive news for tyre industry, the production of natural rubber went up by 6 per cent to 183000 MT during April to July 2019 from 172000 MT, a year ago. 

However, the growth in natural rubber consumption saw a negative trend, with a 5 per cent decline to 389620 MT during the period, from 4,09,540 MT during same period last year mainly due to the lower offtake of tyres by the automobile sector. 

The stock at the end of July, 2019, stood higher at 252000 MT, as compared to 212000 MT during same period last year. The average price saw an uptick at Rs 149.56 per kg in July, 2019, compared to Rs 129.19 per kg during same period last year. 

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel