Please give us an overview of the OTR tyre industry in India?
OTR Tyres can be broadly classified in to two categories, ie mining and industrial construction & material handling, though agriculture based tyres is part of this business globally. The Overall OTR segment has grown well last year though it is difficult to put a specific number on the industry size. This is due to some major players in this segment not being part of ATMA. OTR Segment currently is largely Bias based construction. Radialization is expected to improve from the current 10-15%. The Industry is expected to grow well with the government focus on infrastructure.
Indian Tyre companies are associated with global giants like JCB, Caterpillar, Komatsu, CNH, Hitachi etc. We produce world class tyres that are well accepted by the above players. The real growth will happen with the government’s infra push and expansion of capacities of the above players. Enhanced production of some speciality tyres (large Radial tyres) locally as part of Aatmanirbhar Bharat program will further strengthen the growth in this segment.
Being the leading association catering to the tyre industry, what is your take on the OTR tyre industry for the next three years?
With Government’s focus on Mining Industry specifically Iron Ore, Coal, Construction etc. and focus on rural infrastructure, OTR business is well poised to grow in the next three years. We can expect a strong double digit growth. Apart from the Indian market, Indian OTR players are also major exporters to USA & European markets.
Even during the lockdown roads & highway construction and mining activities went on as usual albeit with fewer labourers. How has this benefited / affected the OTR tyre industry?
The OTR Industry picked up from Q2 and has grown very well in Q4. This has been possible due to government achieving road construction of more than 30 Km per day. Mining has also come back to near normalcy in H2 impacting demand positively.
What are the challenges faced by the OTR tyre industry in India?
Tyre business is highly capital intensive and OTR Industry even more. The overall returns with respect to investment is a challenge. However, this product and manufacturing requires continuous investments in R&D and plants. A fine business balance is essential as well generation of large product portfolio to enrich the mix and have participation in domestic as well as global markets. Any support in this industry would be welcome. This segment accounts for huge exports out of India as more than 90% of production out of India is exported to most advanced markets across the Globe like Europe and USA. This is a huge Foreign Exchange earning avenue for India and will go a long way in forwarding the “Aatmanirbhar Bharat” programme of the Government. I hope Government’s focus on automobile industry under PLI scheme would adequately cover this segment.
For any industry to grow and sustain requires favourable government policies and regulations. What is your take on the current regulatory framework and tweaks needed to propel OTR tyre industry in India?
Considering Government’s “Aatmanirbhar Bharat” concept and plans in growth of infrastructure, OTR Industry will play a significant role. Industry while investing in terms of capacity enhancement, technology upgradation and R&D will need support and encouragement of the Government at each step, which, in turn, will go a long way in improvement of the Infrastructure Sector. A separate focused team with representation from both Government and Industry can be set up to jointly work upon these issues.
Tyre sector in India is normally perceived as a traditional industry with very little modernisation in place. How receptive is the Indian OTR sector to Digitization, IoT, Robotic process automation (RPA), Automation, Artificial Intelligence, data analytics? Has the industry benefited by adopting these technologies?
On the contrary tyre sector in India has kept pace with global giants and are highly modernized and automated plants. Indian tyre industry has been able to meet challenges and requirement of Indian OEM’s, which are internationally competitive. In fact, India has all the global majors present here and manufacturing variety of tyres. Indian Tyre Industry is very agile and receptive towards digitization, IOT, RPS, AI, Data Analysis etc. Few plants in India are already pretty ahead in this field. Adaptation of these technologies is a necessity to stay competitive.
Though the industry has a huge export potential, it still lags. Your comments
The Domestic industry is exploiting the potential very well in the moderate size tyres and most global OEM’s source locally. OTR export is already being done by few players and as the capacities increase this avenue will be further strengthened. Industrial products are already exported big way.
Technology enabled tires embedded with sensors and IoTs are firmly gaining footholds worldwide. How is India progressing on this front?
India is making good in-roads in developing smart tyres with sensor technology. In fact, some tyre companies are already working with this technology. There is huge potential in the OTR tyre Industry for sensors particularly TPMS.
Manufacturing is slowly moving towards sustainability, eco-friendly and energy efficiency products. How are the OTR tyre manufacturers embracing newer products to manufacture tyres to reduce CO2 emission and to manufacture tyres of the future?
Several measures are taken by all Indian manufacturers in improving the sustainability index and reducing carbon footprint through actions like energy sufficiency, water conservations, zero discharge, Non petro raw materials etc. In addition, various environment friendly raw materials are used in OTR manufacturing.
Now, that there are vaccines available to cure Covid-19. What are ATMA's plans for the growth of the OTR tyre industry for the next three years?
We continue to support our OEM players through product innovations and help them reduce import dependency. We are also hoping that the government’s push on infra continues and we will stand by our OEM customers in requesting the government to simplify mining operations further in the country. Indian Tyre Industry has always responded to the need of the consumers and so will be the case in this segment. In line with Government’s plans and growth perspective in Automobile Industry including recently announced scrappage policy, the Industry is poised to grow.
