India Tire Market: Growth in Automotive Sector to boost the Market growth

India Tire Market size was valued at 194.57 Mn Units in 2023 and the India Tire Market revenue is expected to reach 239.30 Mn Units by 2030, at a CAGR of 3 % over the forecast period.
Overview
A tire is a rubber covering around a wheel, providing traction, support, and a cushion against shocks. Automotive tires are essential components of vehicles, contributing to their overall performance and safety. Tires come in various sizes and types, such as summer tires, winter tires, and all-season tires, each designed for specific driving conditions.

The increasing demand for vehicles in India has fueled a strong growth trajectory in the country's automotive sector. As a result, there has been a corresponding rise in the demand for tires. Radial tires are gaining significant popularity in India, primarily due to their superior performance and fuel efficiency. This trend has been well-received by Indian consumers, which significantly boosts the India Tire Market. The Indian government is actively supporting the domestic tire industry through strategic measures. This includes imposing tariffs on imported tires and providing financial incentives to local tire manufacturers, underscoring their commitment to the sector's growth.

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India Tire Market Dynamics
Automotive Industry Growth to boost the India Tire Market growth

The expansion of the automotive sector in India, including the production and sales of passenger cars, two-wheelers, and commercial vehicles, is a significant driver for the India Tire Market. As more vehicles are manufactured and sold, the demand for tires increases proportionally. Ongoing and planned infrastructure development projects, including road construction and improvement, contribute to increased demand for tires. As the road network expands and quality improves, it stimulates transportation, boosting the need for tires across various vehicle categories. The shift towards radial tires is a notable trend in India. Radial tires offer superior performance, fuel efficiency, and durability compared to bias-ply tires. As consumers become more aware of these advantages, the demand for radial tires continues to grow.

Government initiatives and policies significantly impact the tire market. For instance, measures to promote the domestic manufacturing of tires, such as tariffs on imported tires and financial incentives for local manufacturers, which shape India Tire Market dynamics. The dominance of the replacement tire market over the OEM (Original Equipment Manufacturer) market is a driving factor. With the average age of vehicles on Indian roads leaning toward the higher side, the need for replacement tires becomes more pronounced.

Production Demand Gap to restrain the India Tire Market growth

The primary raw material for the tire industry is natural rubber, constituting 72% of the total production cost. India's natural rubber production exceeds 75,000 tons, with tire manufacturers consuming approximately two-thirds of this output. Due to a production-demand gap, India is a significant importer of rubber, leading to disruptions in tire manufacturing processes due to inadequate natural rubber availability. The cost of natural rubber significantly impacts tire production costs, and any disturbances in the supply chain or fluctuations in natural rubber prices affect profit margins. Distributors wield substantial bargaining power. The Indian tire industry is an inverted duty structure. This occurs when the raw material (natural rubber) incurs higher customs duties than the finished tires, leading to increased duties on natural rubber compared to the final tire product. Another issue affecting the India tire Market is the relatively high corporate income tax compared to other countries, contributing to reduced competitiveness among India tire manufacturers.

Foreign trade agreements and regional trade pacts negatively impact the India tire Market, especially through free trade agreements that offer discounts on customs duties for complete tires, affecting domestic manufacturers. The India tire industry demands significant capital investment, and profit margins are narrow, making it challenging for new manufacturers to establish themselves in this competitive sector. The growth of the tire industry in India is contingent on road development and the creation of large freight-speed corridors. Government initiatives focusing on vehicle technology, emission controls, and the availability of standard fuel play crucial roles in shaping the industry's landscape.
India Tire Market Segment Analysis
Based on Tire Type, the market is segmented into Radial Tires, Bias-Ply Tires, and Tubeless Tires. Radial Tires segment dominated the market in 2023 and is expected to hold the largest India Tire Market share over the forecast period. Radial tires are constructed with layers of fabric cords arranged at 90 degrees to the direction of travel (radially), with steel belts running beneath the tread. This radial construction provides stability, better traction, and improved tread life compared to bias-ply tires. Radial tires are the standard choice for most passenger cars in India. They provide a balance of performance, comfort, and fuel efficiency. Radial tires have gained a substantial India Tire market share. As technology has advanced and consumer preferences have shifted, radial tires have become the preferred choice for a broad range of vehicles.



Based on Sales Channel, the market is segmented into OEM Sales and Aftermarket Sales. The OEM Sales segment is expected to hold the largest India Tire Market share over the forecast period. OEM sales are crucial for tire manufacturers as they establish partnerships with automakers to supply tires for new vehicles. The tires provided as original equipment are designed and selected to complement the overall performance and characteristics of the vehicles. OEM sales provide India Tire manufacturers with an opportunity to showcase their products on new vehicles, contributing to brand visibility and recognition. Consumers become familiar with a tire brand if they see it fitted on vehicles from well-known automakers. Tires supplied through OEM channels adhere to stringent quality standards and specifications set by both the tire manufacturer and the automaker, which significantly boost the India Tire Market growth. Compliance with these standards is crucial for ensuring safety, performance, and regulatory compliance of the vehicles.


India Tire Market Regional Insight
Indian-manufactured tires find their way to more than 170 countries worldwide, encompassing discerning markets in North America and Europe. The United States leads the pack, accounting for 19% of India's tire exports and holding the position as the largest market. According to data from the Ministry of Commerce, Government of India, other top export destinations in FY22 include Germany, Brazil, the United Kingdom, and France. The sustained growth in the India tire Market is due to the unwavering demand from these key partner nations.



The northern region of India, including states such as Delhi, Haryana, Punjab, and Uttar Pradesh, is a significant hub for the automotive industry. The demand for tires in this region is driven by the presence of major cities, increased vehicle ownership, and transportation activities. The development of road infrastructure and connectivity projects also influences tire demand. Regions with proximity to major ports, such as those in Gujarat and Maharashtra, play a crucial role in tire exports. These regions benefit from efficient logistics and transportation networks for exporting tires to international markets.
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India Tire Market


Report Coverage
Details


Base Year:
2023
Forecast Period:
2024-2030


Historical Data:
2018 to 2023
Market Size in 2023:
194.57 Mn. Units


Forecast Period 2024 to 2030 CAGR:
3%
Market Size in 2030:
239.30 Mn. Units


 Segments Covered:
by Vehicle Type
Passenger Car Tires
Two-Wheeler Tires
Commercial Vehicle Tires


by Tire Type
Radial Tires
Bias-Ply Tires
Tubeless Tires


by Sales Channel
OEM Sales
Aftermarket Sales


by End-User
Individual Consumers
Commercial Fleet Owners
Agricultural Sector



India Tire leading Manufacturers
1. Balkrishna Industries
2. MRF Tyre
3. JK Tyre & Industries
4. CEAT Limited
5. Apollo Tyres
6. Goodyear India Limited
7. TVS-Srichakra Ltd
8. Birla Tyres Limited
9. Metro Tyres Limited
10. Kesoram Industries Limited
11. Bridgestone India Private Limited
12. Maxxis Rubber India Private Limited
13. Ralson (India) Limited
14. Modi Tyre Company Limited
15. Yokohama India Private Limited
Frequently asked Questions:
1. What is a tire, and why is it essential for vehicles?
Ans: A tire is a rubber covering around a wheel that provides traction, support, and shock absorption. In vehicles, tires are crucial for overall performance and safety, contributing to stability and comfort.

2. How has the demand for vehicles impacted the tire market in India?
Ans: The increasing demand for vehicles in India has led to substantial growth in the automotive sector, consequently driving up the demand for tires.

3. What are the main drivers of the India Tire Market?
Ans: The primary drivers include the growth of the automotive industry, infrastructure development, the shift towards radial tires, and government initiatives supporting domestic manufacturing.

4. What role does road development play in the growth of the India Tire Market?
Ans: Road development is crucial for increased tire demand, especially in large freight-speed corridors. Government initiatives focusing on vehicle technology and emission controls also play vital roles.

5. Which regions in India are significant for tire demand?
Ans: The northern region, including Delhi, Haryana, Punjab, and Uttar Pradesh, is a hub for the automotive industry. Regions with proximity to major ports, such as Gujarat and Maharashtra, are crucial for tire exports.