The analysis points to India’s rapidly growing vehicle population and sizeable middle class as major factors in the growth of the automotive market and, in turn, the tire aftermarket.
“Additionally, brisk industrial activity has boosted the commercial vehicle (CV) population by increasing the movement of raw materials and finished goods,” says S. Satish Kumar, Frost & Sullivan research analyst. “The CV segment is witnessing particularly high replacement rates due to widespread overloading of vehicles and improper vehicle maintenance.”
The full potential of the Indian tire aftermarket is yet to be exploited due to the low levels of radialization in the CV segment, according to the Frost & Sullivan report. “This is because the CV segment has traditionally preferred cross ply/bias tires for their ability to be retreaded more than once in their lifetime. Also, there is no suitable technology available for retreading radial tires, creating another major deterrent to their increased uptake,” Frost & Sullivan adds.
“If the levels of radialization in the CV segment increase to match those of the passenger vehicle segment, potential revenues from the CV tire segment could increase dramatically due to the higher price of radial tries compared to bias/cross ply tires,” says Kumar.
The import of cheap, low-quality and used tires, both for CVs and passenger cars, may threaten Indian tire aftermarket, Frost & Sullivan analysts point out. “Importing such tires has become a relatively easy task due to the increased focus on Regional Trading Agreements (RTAs) and the lowering of import tariffs as a result of India’s integration with the global economy.”
However, the Indian government is now formulating Automotive Industry Standards (AIS), which are likely to be merged with the Bureau of Indian Standards (BIS). “These standards are expected to become mandatory by 2008 and applicable on tires made for domestic use as well as imported ones. Implementation of these standards is likely to go a long way in preventing the import of low-quality inexpensive products and protecting the interests of Indian tire manufacturers,” the report says.
Visit Frost & Sullivan’s Automotive and Transportation practice on the Web at automotive.frost.com. To receive an overview of the latest analysis of the Indian tire aftermarket, e-mail Ravinder Kaur at [email protected].
