The document discusses the tyre manufacturing industry in India using Porter's Five Forces model. It notes that the industry faces high competition, cost pressures, and increasing raw material costs despite growing demand. The top 5 companies control over 80% of production. Bargaining power of suppliers is high due to few suppliers and lack of substitutes, while buyers have moderate-to-high power. Potential entrants face very high barriers to entry due to the capital intensive nature and risks. Threat of substitutes is currently low but increasing.

1. THE TYRE MANUFACTURING INDUSTRY

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

3. 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.

4. 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.

5. Five forces model

6. 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

7. Key Players

8. Major Sales Segment

9. 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.

10. BARGAINING POWER OF SUPPLIERS - High

12. 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

13. Demand for Tyres

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

15. THREAT OF POTENTIAL ENTRANTS LOW, due to HIGH ENTRY BARRIERS

16. 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

17. Shortage of raw material Force of rivalry High risk

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

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