The Automotive Tyre Manufacturers’ Association (ATMA) in India is raising concern over the continued decrease in production of truck & bus radial (TBR) tyres in the country due to slowing economy and rising dumping of Chinese radials.
From more than 550,000 truck and bus radials in June last year, the production sharply declined by 20% to 450,000 radials in December 2016, the latest data released by ATMA has revealed.
The TBR tyres has been the fastest growing segment for the tyre industry accounting for two-thirds of the Rs350 billion investments made in recent years.
With new capacities going on stream and declining production, the industry is staring at the grim prospects of gross under utilisation of TBR capacities. Truck and bus tyres account for 55% of the tyre industry’s revenues in India.
“It’s a tough environment for tyre manufacturing in India. The industry has been squeezed from both input and output sides. Indiscriminate surge in Chinese radials and slowdown in commercial vehicle sectors has been hurting the tyre production in India. Over the last one year, the industry has hardly grown in size and the top line is under pressure,” said KM Mammen, ATMA Chairman.
The situation coupled with increasing cost of all inputs is severely affecting the viability of tyre companies. In view of excess capacities and continued surge in Chinese tyre imports, he said the industry is not in a position to pass on the increased cost of production.
ATMA in a communication to Commerce Ministry stated that contraction in manufacturing of tyres is a matter of grave concern and policy enablers need to be put in place for the growth of the industry and redeeming the investments made.
Contraction in tyre manufacturing is also a dampener for the rubber growers as the tyre industry consumes more than 65% of the domestic natural rubber production, it said.
ATMA is the representative body of automotive tyre industry in India comprised of eight large tyre companies representing over 90% of production of tyres in India.