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Investment Proposal Tyre Industry
Investment Proposal Tyre Industry
com)
MHCV PV 2/3 Ws
Radial Tyres
60%
100
40%
50 Replacement
20%
0 46%
FY FY FY FY FY FY FY FY FY FY FY 0%
11 12 13 14 15 16 17 E 18 E 19 E20 E 21 E 2009 2014 2019
Figure: Category wise Sales Figure: Marketwise Sales Figure: Radial Tyre Share
Birla, 5% MRF,
Barriers to Entry
29%
Balkrish
Competitive Rivalry
na, 7%
Ceat, JK Apollo,
Bargaining Power of Suppliers 12% Tyres 17%
Bargaining Power of Buyers , 13%
Figure: Porter 5 Forces Analysis Figure: Market Share of Major Players Figure: Herfindahl - Hirschman Index
30%
Anti-dumping duty by Indian government would soon be a reality; removal of anti-dumping duty by US
High geographic penetration potential in PV segment and shifting focus towards this segment; mitigating vagaries of cyclicality
in CV segment
Radialization of tyre industry; would enable players to earn better margins in comparison to bias tyres
Strong future outlook, with a CAGR of 9%, for Indian auto sector the prime feeder of tyre industry
Challenges
Automotive Tyre Manufacturers Association (ATMA) has asked the Ministry of Commerce for duty free import of natural rubber
equivalent to deficit in domestic production
Industry is prone to sharp volatility in natural rubber prices
Manufacturers are also worried about rampant dumping of Chinese radial tyres for truck bus segment.
Significant capex by major playesr would put pressure on utilization levels and hamper the operational margins of the industry
Manufacturers are unable to pass on price rise to OEMs
Looming threat over export due to cheap Chinese imports
Very high reliance on automotive industry and a threat of backward integration from major automobile players
Company Section
Ceat
MRF
JK Tyres Apollo
Sandeep Kumar (sandeep7257@gmail.com)
BKT Goodyear
TVS
Conclusion