On the price trends, the IMaCS report says that moderate demand slowdown and decline in prices of rubber contributed to increase in tyre prices at sequentially lower rates to 4.5% in Q4FY2012.
The demand for tyres by major sectors stands at OEMs (47%), replacement demand (47%), and exports (6%). While OEM demand growth moderated from 28% in FY2011 to 14% in FY2012, replacement market demand declined 4% in FY2012 primarily of declines in two major markets—commercial vehicles (CVs) and two wheelers (2Ws).
India’s tyre production increased 5.2% during FY2012 to 125 million. Production growth peaked at 29.9% in Q4FY2010, but has thereafter declined substantially. The recent slowdown has been primarily because of substantial slowdown in CV and 4W tyre demand growth.
Automotive tyre demand has increased at a three year annual average of 18% to 131 million in FY2012. Demand growth has slowed down from 30% in FY2011 to 5% in FY2012 because of lower demand growth from original equipment manufacturers (OEMs)/automotive manufacturers.
The Indian tyre industry has around 43 companies, out of which the top 10 companies account for around 90-92% of total production. Although imports constitute only 8% of total tyre production, the share of imports has been increasing, driven by increased imports of tyres for passenger cars and CVs.