THE TYRE MANUFACTURING INDUSTRY

PRESENTED BY: NAME ROLL NO. Dattu Ade 1 Reena Alva 4 Vicky Barot 6 Abhijit Bhongle 8 Bhushan Bhoye 9

NAME ROLL NO.

Dattu Ade 1

Reena Alva 4

Vicky Barot 6

Abhijit Bhongle 8

Bhushan Bhoye 9

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.

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.

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.

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.

Five forces model

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

Tier 1 players

Present in all three segment -

1)Replacement market

2)Original equipment manufacture(OEMs)

3)Export

Tier 2 player

Key Players

Major Sales Segment

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.

The tyre industry in India is fairly concentrated, with the top 5 companies accounting for more than 80% of the total production of tyres.

BARGAINING POWER OF SUPPLIERS - High

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

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

Demand for Tyres

Bargaining Power of Buyers OEM’s High In Replacement Market Moderate Switching Cost Low Threats of Backward Integration Low

OEM’s High

In Replacement Market Moderate

Switching Cost Low

Threats of Backward Integration Low

THREAT OF POTENTIAL ENTRANTS LOW, due to HIGH ENTRY BARRIERS

LOW, due to HIGH ENTRY BARRIERS

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

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

Shortage of raw material Force of rivalry High risk

Shortage of raw material

Force of rivalry

High risk

THREAT OF SUBSTITUTES Low, but increasing Import of tyres ISI mark made compulsory

Low, but increasing

Import of tyres

ISI mark made compulsory

Porter’s Model Entry High returns Barrier High risks High Low High Low Exit Barrier

Entry High returns

Barrier High risks

High

Low

High Low Exit Barrier