The demand for tires to increase by 7 to 9 percent this Fiscal Year: ICRA
By admin ( Apr 26, 2022 )
A statement was released by ICRA which is a leading, independent, and professional investment information and credit rating agency, suggesting that tire demand in the domestic markets will grow by 7 to 9 percent in FY2023, supported by a recovery in OE demand throughout all segments and constant growth in replacement volumes.
ICRA also cautioned that the industry margins will remain under pressure due to the rise in input prices. They also suggested that the demand during this fiscal year will be dominated by factors like the gradual easing of supply-chain-related constraints that have been there in the previous fiscal year in the passenger vehicle segment, rising growth in the commercial vehicle segment, and constant replacement volumes.
According to the reports in the domestic press, ICRA said that the Tire industry is continuously hitting record highs in terms of revenue generation, reflecting higher domestic demands and with exports also getting a boost and increased realizations. In the 2021 October-December quarter, the tire demand did fall and was relatively down but the industry recuperated and revenue grew by around 12.5 percent, which was definitely a notch high compared to the same quarter of 2020.
The rating agency explained how the tire industry recovered and grew in FY22, the estimated growth being around 11 to 13 percent. This all followed after the two-year restrictions and constraints domestic markets were facing due to the pandemic. Plus, not to forget vehicle sales getting down due to supply chain issues, production shutdowns and hence less manufacturing, semi-conductor shortages, and an increase in the prices of raw materials. All of these negatives were dominating for the past two years but this year the country is seeing to stand up again. Although replacement tire demand was strong all across product segments.
India also has posted strong growth in exports of tires in FY22. Increase demands from important export destinations such as the US and European nations were also seen all through FY22. The increasing acceptance in the global market has increased the prospects of exports from India even to unknown territories. The government also has a very relaxed policy regarding the import of tires and hence this industry is booming in the FY22 and is expected to do so in the coming years.