Tyre maker expects strong growth in 17-inch-and-above passenger vehicle tyres as SUV and premium car sales reshape demand.
23 Jan 2026 | 254 Views | By Darshan Nakhwa
Continental Tyres India expects steady mid-single-digit growth in replacement demand for tyres over the next five years, driven by structural shifts in the passenger vehicle market, with a growing preference for sport utility vehicles and premium cars, and renewed consumer confidence post-GST reforms last year.
The company expects its ...
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Continental Tyres India expects steady mid-single-digit growth in replacement demand for tyres over the next five years, driven by structural shifts in the passenger vehicle market, with a growing preference for sport utility vehicles and premium cars, and renewed consumer confidence post-GST reforms last year.
The company expects its core tyre replacement business to grow at a compound annual growth rate (CAGR) of 5-6% through 2030, while the 17-inch and above passenger vehicle tyre segment is likely to expand at more than 20% annually, reflecting rising demand for large-wheel SUVs and premium cars.
“Currently, 99% of our business comes from replacement demand. This business has been growing at a CAGR of 5-6%, and it is expected to continue to grow at that pace for the next five years,” Samir Gupta, Managing Director of Continental Tyres India, told Autocar Professional.
“More utility vehicles and premium cars are now being sold in the country, and a premiumisation trend is sweeping the market, which means tyre sizes are going up. This aligns with our overall strategy and competency of making bigger car tyres,” Gupta added.
Continental Tyres India is the arm of Germany-based Continental AG. In 2025, the tyre maker shifted its focus in India towards passenger-car radials (PCR), also known in the company’s global terminology as passenger and light-truck (PLT) tyres, which are delivering robust business growth.
In June last year, the company announced a Rs 100 crore investment in its Modipuram facility in Meerut, Uttar Pradesh, to install machines and convert its erstwhile truck and bus radial (TBR) line into one dedicated to passenger car and SUV tyres. The company exited local TBR manufacturing after finding the segment highly price-sensitive, limiting sustainable profitability despite product performance.
According to Gupta, the new PLT line at Modipuram will not only add incremental volumes but also expand Continental’s ability to manufacture larger rim-size tyres locally. “Several premium cars and SUVs today are coming with 20-, 21-, 22- and 23-inch tyres. It is important that we start serving the needs of those customers, and that is why we have decided to localise even those sizes at Modipuram,” he said.
Production of larger rim tyres is critical in a market where premiumisation is gaining traction, Gupta said. “About one-third of the Indian cars already run on 17-inch and above tyres, and that share is expected to exceed 50% in the next five years. And that is where our competency lies.”
This premiumisation trend is reinforced by broader PV market dynamics. In 2025, India’s passenger vehicle industry posted record wholesale dispatches of 44.9 lakh units, up 5% year‑on‑year, despite a volatile first half marked by weak sentiment and financing constraints. Volumes rebounded sharply from September, aided by GST 2.0 reforms, better credit conditions, and festive demand. Utility vehicles led the surge with 29.5 lakh units (+7.4%), while passenger cars accounted for 13.8 lakh units.
Global Risks, Local Opportunities
While revival of demand in the domestic market is a positive for tyre makers, Continental’s leadership emphasised the broader challenges that persist globally. “Geopolitical uncertainty remains high. Multiple conflicts, regulatory changes across markets, rising logistics and raw material costs, all create challenges for tyre manufacturers,” Gupta said.
The tyre industry is highly energy-intensive, making cost pressures particularly acute during periods of volatile input prices. Continental is therefore focusing on energy efficiency, reducing wastage and shifting toward greener sources such as wind and solar power.
The company is also working to incorporate recycled materials where feasible. “We started making polyester from recycled PET bottles. Recycling materials that are otherwise an environmental hazard and turning them into something useful is one of the steps we have taken,” Gupta said.
Gupta added that India remains one of the most attractive growth markets for the group, supported by strong domestic consumption. “India’s economy is growing at 7-8%, despite global headwinds. Infrastructure improvements and manufacturing support from the government have had a positive impact on automotive demand,” he said.
Changing consumer behaviour has further lifted demand for larger tyres, which are a key focus area for Continental. “We get the best opportunities out of challenges,” Gupta added. “We are finding ways to convert obstacles into avenues for growth.”
Replacement vs OEM Business
Continental’s business in India is heavily skewed toward the replacement market, which Gupta said contributes about 99% of volumes. “We are in touch with OEMs and looking at opportunities, but we do not plan to be a mass OEM supplier. Our approach remains niche and premium when it comes to OEM relationships. We want to be chosen for performance, not price,” Gupta said.
Replacement tyres tend to have higher margins than OEM supply, and growth is backed by an expanding vehicle parc and higher tyre replacement cycles for UVs and premium cars.