Tyre firms upbeat about demand for replacements_Tyre firms upbeat about demand for replacements

Tyre firms upbeat about demand for replacements

May 30, 2024

Tire makers are optimistic about demand for replacement tires, with original equipment manufacturers (OEMs) expecting the sector to take more time to recover in the second quarter. With limited staffing, some tire companies have been operating their plants for more than a week. Rajiv Budhraja, secretary general of the Automotive Tire Manufacturers Association (Atma) “The exercise is mainly to clear the inventory and produce tires for agricultural vehicles before the blockade is declared.””

Apollo Tyres has partially resumed production with three of its four plants in India operational. CEAT has started operations at five of its six plants for tires (except Mumbai). Conditions in Maharashtra are said to be unfavorable for plant openings. Many tire plants are located in the west and south. However, demand in the tire industry remains weak and the current start-up rate is around 30%. Budhraja said, “2020 fell sharply in the first quarter and tire replacement demand showed signs of recovery in the second quarter. “He added that the OE pre-blockade sector is underperforming and COVID-19 has made the situation worse,” he added.

The demand for replacement tires comes mainly from truck tires, which generate most of the revenue in this sector. The OE segment accounts for about 50% of passenger car and two-wheeler tires, but 20% of the truck and bus tire category.

“The current demand is mainly for agricultural vehicles, mining vehicles and trucks. Once the blockade is lifted, the demand for replacement passenger cars and two-wheelers is expected to increase.” In our current scenario, we can expand up to 50 percent by adding capacity.

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