India's tyre industry projected to see 7-8% growth in FY26, replacement demands to play key role

Share via: The Indian tyre industry is expecting a growth in sales owing to replacement demand. The Indian tyre industry is expecting a growth in sales owing to replacement demand. Get Launch Updates on Notify me The Indian tyre industry is likely to record up to eight per cent growth in the current financial year on the back of replacement demand. This growth is projected despite the muted original equipment offtakes. The upcoming festive season, coupled with the repo rate cuts and favourable monsoon conditions, upbeat consumer sentiments are likely to play a key role in this growth trajectory. JK Tyre & Industries MD Anshuman Singhania said that the Indian tyre industry remains an export-heavy manufacturing sector, with outbound shipments surpassing ₹25,000 crore in FY25. He also stated that in FY26, the domestic tyre industry is expected to achieve a growth of up to eight per cent. “In FY26, the Indian tyre industry is expected to achieve 7-8 per cent growth on the back of the strong domestic replacement demand despite muted OE (original equipment) offtakes,” PTI quoted Singhania saying. He attributed this growth projection to consistent investments in capacity expansion, improvements in manufacturing efficiency and increased focus on enhancing the R&D capabilities. “With the upcoming festive season, coupled with the benefits of the recent repo rate cuts and favourable monsoon conditions, we expect the consumer sentiments to improve further,” Singhania said. Apollo Tyres CFO Gaurav Kumar also echoed similar expectations. He said that the company expects the demand momentum to improve in the second half of the fiscal year, with a rebound in infrastructure and mining segments post-monsoon. “Moving on to the raw material outlook, we expect the raw material cost to be slightly lower in Q2 vis-à-vis the current levels. However, with a bit of uncertainty given on the exchange rates that are currently prevailing,” he added. Speaking on this, Icra Senior Vice President & Co-Group Head (Corporate Ratings) Srikumar Krishnamurthy said that domestic tyre demand from OEMs in the commercial and passenger vehicle segments is likely to lag the growth in two-wheelers. “Replacement demand, which represents the largest pie of the tyre industry, is expected to be supported by factors like favourable rural sentiments, festive demand, and expected rate cut effect on consumption, even as urban demand is soft,” he added. Crisil Ratings, in a report, said the domestic tyre industry is likely to witness revenue growth of 7-8 per cent this fiscal, driven by replacement demand, which accounts for half of annual sales. The segment is estimated to post growth even as offtake by original equipment manufacturers is likely to be subdued, it stated. Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape. First Published Date: 25 Aug 2025, 07:53 am IST
Source: hindustantimes.com