Projected Indian tire industry earnings to reach INR 13 trillion by 2047: Report by ATMA and PwC
The Indian tyre industry is poised for significant growth, as demand for tyres increases with the movement of people and goods within the country. This growth is expected to be driven not only by passenger vehicles and two-wheelers but also by commercial vehicles, closely tied to freight and consumption.
The industry is being propelled forward by the involvement of major multinational corporations, including automotive manufacturers like Toyota, with extensive global production and distribution networks. This influx of global players is transforming the Indian tyre industry into a global market leader, driving advancements in technology and expanding market reach.
Servitisation, periodic management, advisory, health tracking, and professional fleet services are becoming critical for the tyre industry. This shift towards digitalisation and services mirrors the path already embarked upon by the auto industry.
The tyre industry is expected to play a pivotal role in enabling India's automotive ambitions, with OEM demand for tyres in India growing at nearly 10% CAGR due to infrastructure spending and rising per capita incomes. Arun Mammen of ATMA views this as a once-in-a-generation opportunity for India's automotive aspirations.
However, the industry faces challenges such as the availability of natural rubber, regulatory unpredictability, and non-tariff barriers. To overcome these hurdles, sustainability is a boardroom imperative for the tyre industry, with a focus on finding alternatives to natural rubber, reducing emissions, and adopting futuristic manufacturing techniques.
As the industry evolves, tyres in India are undergoing a transformation, becoming tech products with advanced material engineering and electronics integration like TPMS. This shift is expected to increase the global competitiveness of Indian tyres, with revenues from tyre production in India potentially growing twelve times to reach ₹13 lakh crore by 2047.
India has the potential to radically widen its global presence by focusing on targeted usage scenarios and capitalising on emerging new free trade deals. The Indian tyre industry's role could transition from a domestic supplier to a global brand ambassador of Indian manufacturing. Brand-building and tech-led productivity will be key determinants of India's global competitiveness in the tyre industry.
The PwC "CHARGE" framework emphasises adaptability, innovation, and partnerships for the tyre industry. By embracing these principles, the Indian tyre industry could redefine its perception, moving beyond just rubber rings on wheels to high-tech, sustainable, export-ready products. India's tyre industry is not just keeping pace with the global automotive sector; it's leading the charge.
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