The primary concern for the industry is heavy commercial segment, particularly truck tyre sale which remains sluggish
Tyre sector is expecting a stable revival in the sales only in the last quarter of FY20 despite improved performance by passenger vehicle segment in October. The primary concern for the industry is heavy commercial segment, particularly truck tyre sale which remains sluggish.
Rajiv Budhraja, director general of Automotive Tyre Manufacturer’ Association, said “The rate of decline in sales has slowed and it is bottoming out. We expect it picks up in the last quarter of the fiscal year. The overall tyre production is down by 8-10 % for April-October 2019 year-on-year. Though passenger vehicle segment showed improvement, too many holidays and plant closures affected sales during the month.”
Original equipment (OE) sales graph have shown downward growth. Satish Sharma, President Asia Pacific, Middle East and Africa of Apollo Tyres said, “OEs contracted every month in the first half of the fiscal year while the demand from replacement market held firm till July. Sales slackened in August and September owing to the slowdown in the economy and floods leading to lower mining activity. While the bottoming out might have happened for the OEs, the revival seems to be sluggish and gradual. Replacement demand has picked up from October onward.”
Anup Mangaserri, senior vice president, sales, CEAT Tyres, said, “E-commerce and movement of car carriers did help the heavy commercial segment during October, but the performance is still poor.”
The industry fears another disruption owing to transition to BS-6 norms. “The passenger vehicle segment has already moved to the new norms. But the commercial sector and two-wheelers are still following old norms and December could be bad for these sectors as production is likely to drop.” Mangaserii added.
The only relief for the industry is that the domestic slowdown helped increase tyre exports from the country. The total tyre exports are up 10-12 % so far in 2019-20 compared with last year. It is going mostly to the US and West Asia.
Source: Economic Times