Archive · 18 Jul 2025
Tyre Industry to See 7-8% Growth Driven by Replacement Demand
The Indian tyre industry is likely to grow by 7-8% this year, helped by people needing to replace their old tyres.
Companies like CEAT, MRF, Apollo, and JK Tyre are expected to benefit.
However, challenges exist, including tariffs from the US and potential competition from cheaper tyres from China.
Despite these issues, the industry is expected to maintain good profit margins due to high capacity utilization.
CRISIL projects 7-8% revenue growth for India's tyre industry this fiscal year.
Strong replacement demand is the primary driver of growth, with the segment making up about half of total tyre sales.
Export volumes are expected to grow 4-5%, driven by demand from Europe, Africa, and Latin America.
The industry faces headwinds from trade tensions, including US tariffs on Indian goods and potential dumping from China.
Operating profitability is expected to remain stable at 13-13.5%, despite raw material cost pressures.
- Who
- CRISIL Ratings projects the growth.
- What
- India's tyre industry is projected to grow by 7-8% in revenue.
- When
- This fiscal year
- Where
- India
- Why
- Driven by strong replacement demand.
Challenges
Opportunities
Profitability
Challenges
Potential for lower profit margins, due to the increasing cost of raw materials and potential for lower cost Chinese imports.
Opportunities
Stable operating profit margins despite raw material cost pressures.
- Projected Revenue Growth
- 7-8%
- Primary Growth Driver
- Replacement Demand
- Export Volume Growth
- 4-5%
- Operating Profitability
- 13-13.5%
- Capex
- Rs 6,000 crore
