Essay in India Tyres Industry


AN Industry Overview

This project looks at the auto Tyre sector in India and how the Distribution channel helps this industry to grow and serve the needs with the End buyer. | JOB DONE BY: VIKRAM FALOR: DM14157RAMYAA RAMESH: DM14266AMIT SHUKLA: DM14104

Introduction: -

The American indian Tyre Industry is a important part of the Car Sector and a huge interdependent on those of the Automobile players. The Of india tyre market accounts for roughly 5. 0% of the Global tyredemandgeneratingrevenuesofapproximately`30, 000cr for FY2011. Out that 90-95% comes from the household market. You will find around 40 tyre producers in India and the top ten tyre player's account for about 90-95% in the total tyre production in India. The growth in home tyre sector was negatively impacted by the global slowdown in2009. Nevertheless, the industry experienced are mark able restoration in 2010. This growth was primarily driven by solid revival in automobile require on the back side of improvement in macro overall economy and reducing of interest costs.

The American indian Tyre Industry produced 119. 2 mn units of tyres (1. 5mntonnes) in 2010‐11. With an average, In Indian early on 60. 0% of the production is for replacement unit market, and then 25. 0% sold to Oes directly plus the balance is definitely exported. Worldwide, the ORIGINAL EQUIPMENT MANUFACTURING (OEM) segment makes up 30. 0% of the tyre market, export products 10. 0% and the balance from replacement market. Exports turnover to get India during 2010‐11 was at `3, 600cr. Segmental Breakup of Industry Turnover FY11:

The Indian Tyre industry is definitely characterized by the raw materials intensity (Raw material costs account for approximately 70% of turnover). There exists huge competition among the top few players whom dominate the industry and that leads to low margins. These players are continuously focused on advertising and marketing, branding goods and conditioning their division network simply by increasing supplier network in order to increase their business.

Inputs in Tyre:

The industry is highly intensive while using Raw materials Consumption. The Raw materials costs makes up 65-70% in the total creation cost of tires. Natural rubber constitutes may be the major natural material pertaining to the product and it is used by the industry which will accounts for about 43% with the total expense. The various other raw materials used by the tyre industry are crude derivatives such as carbon dioxide black, rubberized chemicals, artificial rubber and nylon tyre cord cloth, Therefore , growing crude oil prices increase natural material costs and affect the profitability of the company.


Based on the client segments, the tyre market has been broadly divided into a couple of categories: Factory Manufacturers (OEM)

Replacement Marketplace.

1) Factory Manufacturers – This includes vehicle manufacturers just like – Hero Honda, Tata Motors, Marathi Suzuki and so forth The demand from your OEM industry fluctuates immediately in line with end-use demand for the automobile/construction equipment segment; consequently prone substantial degree of cyclic variation. The total tyre sales to OEMs are on an average 40-45% in the total product sales. 2) Alternative Market – These are the final customers who also replace older tyres with their vehicles. This kind of demand will depend on factors including vehicle human population on - road, highway conditions, overloading norms, miles driven. This is less cyclical than ORIGINAL EQUIPMENT MANUFACTURING (OEM) demand and is generally delivers higher-margin business for companies. The replacement unit market accounts for 45-50% from the total product sales. Radializationof Cartyres:

Radialization of Car tires has brought an important change in the industry. Inside the Passenger Car market, Radialization has come to 98. 0%. These tires have their wires running radially from bead at 85 degrees viewpoint to the remora long the outer surface from the tyre. Rewarding mediums that are used in these tires are synthetic, polyester, nutritional fibre glass and steel. These tyres are often 20. 0% more expensive compared to the Bias Tyres. These tires have longer life and...

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