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Indian Tyre manufacturing industry
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Indian Tyre manufacturing industry

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A study on the Indian Tyre Industry

A study on the Indian Tyre Industry

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  • 1. THE TYRE MANUFACTURING INDUSTRY
  • 2. INTRODUCTION
    Faces huge competition, cost and price pressure.
    The zooming auto industry has driven the growth.
    The number of vehicles is swelling.
    The truck and bus market is the largest segment in terms of value.
  • 3. Economic expansion and road development has made a contribution.
    eg. The golden quadrilateral and the NSEW Corridor project.
    Though the volumes have increased the profitability has gone down due to the increase in raw material cost.
  • 4. Five forces model
  • 5. A 2 tier Industry
    Tier 1 players
    Present in all three segment -
    1)Replacement market
    2)Original equipment manufacture(OEMs)
    3)Export
    Tier 2 player
  • 6. Key Players
  • 7. Major Sales Segment
  • 8. Intensity of Rivalry : High
    The tyre industry in India is fairly concentrated, with the top 5 companies accounting for more than 80% of the total production of tyres.
  • 9. BARGAINING POWER OF SUPPLIERS
    - High
  • 10.
  • 11. Number of Suppliers – Low
    Availability/ acceptability of raw material substitutes – Low
    Switching costs – High
    Threat of forward integration – High
    Tyre industry not the key customer
  • 12. Demand for Tyres
  • 13. Bargaining Power of Buyers
    OEM’s High
    In Replacement Market Moderate
    Switching Cost Low
    Threats of Backward Integration Low
  • 14. THREAT OF POTENTIAL ENTRANTS
    LOW, due to HIGH ENTRY BARRIERS
  • 15. ENTRY BARRIERS
    Highly capital intensive industry
    Rs4bn for radial tyre plant with a capacity of 1.5mn tyres
    Rs1.5-2bn for a crossply tyre plant of a capacity to manufacture 1.5mn tyres
    High raw material costs
  • 16. Shortage of raw material
    Force of rivalry
    High risk
  • 17. THREAT OF SUBSTITUTES
    Low, but increasing
    Import of tyres
    ISI mark made compulsory
  • 18. Porter’s Model
    Entry High returns
    BarrierHigh risks
    High
    Low
    HighLowExit Barrier