Specialty chemicals company Lanxess AG is optimistic about the future of India’s tyre industry with many “rising stars” coming from the country and personal mobility business continuing to grow, according to Matthias Zachert, Chairman of the board of management of the company.
“Mobility is something that has always led to liberty, flexibility for mankind. I think this will be a trend that in the next 10-20 years is not going to vanish. So mobility will be important. And if mobility is important, then the tyre industry is important. And therefore, I look positively at the tyre industry going forward, not only the one that is located in India,” Zachert said.
Lanxess is the world's largest supplier of rubber additives. It offers rubber chemicals, specialty chemicals and processing aids to the rubber industry and tyre manufacturers. Of the company’s overall chemical business in India, about 25% of business comes from the rubber and tyre industry. On a group level, its exposure to the mobility sector is 10%, the company’s management said.
According to Zachert, the tyre market was pretty consolidated globally for many years. However, the market opened up in the last 10 years, strongly driven by Chinese and Indian tyre manufacturers. “We have rising stars here in India,” he said.
India’s tyre industry expects to double its exports by value by the end of the decade with the country becoming the top third tyre manufacturing hub globally. The industry is targeting to increase its export to Rs 50,000 crore by 2030 from the current Rs 23,000 crore, with Western Countries seen as key markets, according to Automotive Tyre Manufacturers Association.
Exports contribute almost one-third of the tyre production in India in value terms and have almost doubled in the last four years. India currently exports tyres to over 170 countries, with large demand coming from the EU, the US, Brazil, UAE, and the UK.
Meanwhile, in the ongoing financial year 2025, India’s tyre manufacturers are set to see revenue growth of 7-8%, driven by modest increases in volume and realisations. However, rising natural rubber prices and weak export demand pose challenges for the industry, according to a CRISIL report.
The uptick expected in revenue, spurred by a 3-4% increase in both volumes and realisations, is nearly double the growth seen last year. However, it falls short of the robust 21% compound annual growth rate between fiscals 2021 and 2023, CRISIL said.
In India, replacement demand, mainly from commercial and passenger vehicles, is expected to drive volume growth, while original equipment manufacturer demand is expected to rise only 1-2% due to slow growth in commercial vehicle sales. Replacement demand accounts for two-thirds of domestic tyre sales, with the remaining from OEMs.