India’s Tire Industry: Despite Shrinking Demand, Major Manufacturers Engage in Business Expansion

India’s four major domestic tire manufacturers MRF, Apollo Tyres, CEAT and JK Tyre & Industries are continuing investing in boosting production capacity of automobile tires. According to India’s Automotive Tyre Manufacturers Association (ATMA), the industry’s sales reached 630 billion Indian rupees in fiscal year ending March 2019. In fiscal year ending March 2020, a decrease in demand for new-vehicle tires due to a reduction in domestic automobile sales appears to have reduced industry profits. However, MRF and Apollo among others will continue new factory projects that have already started. Companies are strengthening their production systems in anticipation of expanding production and growing ownership in the future. MRF plans to start its tenth domestic plant in Dahej, Gujarat state in 2020. It will manufacture automobile tires with an annual production capacity of 6.73 million units. Investment in the first phase will reach 20 billion Indian rupees. The company announced in February 2020 that it had begun investment in the first phase of the project.

Apollo is building a new plant in Chittoor, Andhra Pradesh state with operations scheduled to start in 2020. The new plant is Apollo’s fifth factory in India and its seventh factory globally. Annual production capacity is planned to reach 5.3 million passenger vehicle tires and 1 million truck and bus tires in the first phase. Total investment in the first phase is 18 billion rupees.