Taiwanese tyre-maker Maxxis has launched its first manufacturing plant in India, increasing the competition in the tyre industry.
This came after four years the company entered the Indian market.
Maxxis is a unit of Taipei-listed Cheng Shin Rubber Industry.
It will begin by producing tyres for scooters and motorcycles at the US$400 million factory in Sanand, a fast-developing auto hub in the western Indian state of Gujarat.
The plant can produce up to 20,000 tyres and 40,000 tubes per day.
Maxxis’ expansion is set to intensify competition with rivals Apollo Tyres, CEAT, J.K. Tyres and Continental in the Indian market for two-wheeler tyres. Maxxis said it aims to capture at least a 15% market share within the next five years.
India is one of the world’s top two-wheeler markets. Motorcycle sales in the country grew 6% year-on-year in 2017 to 11.93 million units, according to data from the Society of Indian Automobile Manufacturers. Sales of scooters rose 14% to 6.4 million units during this period.
According to a report by credit ratings agency ICRA, India’s tyre market is set to grow 8%-10% this fiscal year, aided by the strong pickup in demand for automobiles and replacement of parts.
Plentiful rains over the past two years and New Delhi’s growing focus on the rural sector are expected to boost farm wages in India, spurring demand for consumer goods such as automobiles in the hinterlands. SIAM, an industry lobby group, has forecast two-wheeler sales in India to grow 12% in 2018.
“We monitored the market for over two decades and then devised the strategy for entering India,” said Cheng-Yao Liao, president of Maxxis Rubber India.
Maxxis opened an office in India in 2014 and has since been supplying imported tyres to Indian companies such as Maruti Suzuki India, Honda Motorcycle & Scooter India, Mahindra & Mahindra and Tata Motors.
The Taiwanese company has 21 manufacturing plants worldwide and operates in many countries, including China, Thailand, the U.S., U.K., and Japan. Its products include tyres for cars, two-wheelers, light trucks, buses and agricultural vehicles, among others.