• Domestic tyre volume growth to slow to 4-6 percent in FY2025 due to a high base and subdued commercial vehicle demand.
• Replacement market to remain stable, supporting overall volume expansion.
• Tyre exports to see low single-digit growth after contracting in FY2023.
• High natural rubber and crude oil prices to squeeze margins by 200-300 basis points in FY2025.
• Investments in new capacity to be moderate due to adequate existing capacity and a modest demand forecast.
• Focus on debottlenecking, digitalisation, and R&D for sustainable and smart tyres.
• Organised tyre retreading to grow at a CAGR of 7-9 percent on rising environmental focus and government support.

Domestic Growth to Ease

According to ICRA, India's tyre industry is expected to moderate domestic volume growth in FY2025 due to a high base effect and subdued demand from the commercial vehicle segment. However, healthy replacement market demand and growth in original equipment manufacturer (OEM) sales for passenger vehicles and two-wheelers are expected to partially offset this slowdown.

Nithya Debbadi, Assistant Vice President and Sector Head, ICRA, said: “Tyre exports are expected to remain moderate in the near term because of muted demand growth in key export destinations, namely the US and Europe. Further, supply chain issues arising from the Red Sea crisis have raised freight costs (resulting in increased cost of tyre) and elongated transit times. In terms of domestic factors, despite an elevated base, consumer segments are expected to record a mid-single digit growth (PV at 4-6 percent, 2Ws at 5-7 percent), on the back of healthy underlying demand. However, growth in the CV segment is expected to be impacted by the brief pause in infrastructure activities because of the Parliamentary Elections, with the Model Code of Conduct, which is in force because of the Parliamentary elections, and the impact of high base. Tractor demand growth is expected to be supported by the forecast of above normal monsoons, aiding rural cash flows.”

ICRA expects the replacement market, which contributes to over two-thirds of the industry volumes, to remain stable, aided by healthy demand across the segments. Tyre export volumes, which contribute approximately 25 percent of the industry’s sales (by value), are estimated to have recorded a low single-digit growth in FY2024 after contracting by around seven percent in FY2023, owing to demand shrinkage in key markets amid inflationary pressure and higher interest rates.

 “After a strong growth in two consecutive years, the tyre industry’s revenue growth (consolidated for ICRA’s sample set of seven leading tyre manufacturers) is estimated to have moderated to mid-single digits in FY2024 with estimated domestic volume growth of 6-8 percent, flattish realisations and subdued exports. For FY2025, the industry revenues are expected to grow by 5-7 percent, primarily driven by domestic OEM and replacement segments,” added  Debbadi.

Margins to Contract on Rising Input Costs

Indian tyre companies' operating margins, which soared to 15-17 percent in FY2024 on the back of favourable raw material prices, are expected to take a hit in FY2025. This comes after a sharp increase in input costs since January 2024.

Global supply shortages triggered by adverse weather in Southeast Asia, a key natural rubber (NR) producing region, have caused international NR prices to jump 25-30 percent in the past four months. The RSS3 grade, a benchmark NR type, is currently trading around INR 185-186 per kg, with domestic prices mirroring this rise due to India's reliance on NR imports. This, coupled with increasing crude oil prices, is likely to squeeze tyre industry margins by 200-300 basis points in FY2025, according to ICRA.

Focus on Efficiency and Sustainability

With existing capacity utilisation at 75–85 percent, investments in new plants are expected to be moderate. The industry will likely shift towards debottlenecking existing facilities, process improvements, digitalisation, and research and development (R&D) for sustainable and smart tyres with lower rolling resistance and improved safety features.

Growth in the Retreading Segment

Rising environmental concerns and government initiatives are expected to drive the organised tyre retreading market at a CAGR of 7-9 percent during FY2023–FY2026. Focusing on sustainable practices, improved technology, better road infrastructure, and increasing radialization in the commercial vehicle segment will support this growth.

Credit Metrics to Remain Comfortable

Despite the expected margin contraction, the industry's credit metrics are forecast to remain healthy due to ongoing profitability and moderate capital expenditure plans. The industry is expected to continue investing 6–9 percent of its revenue in capex during FY2025.

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Ecolomondo Corporation, a Canadian developer of sustainable tyre recycling technology, has released its unaudited financial results for the second quarter ending 30 June 2025. The period was marked by significant progress in commercialising its Hawkesbury thermal decomposition facility, particularly within the recovered carbon black (rCB) department. A major milestone was reached with the installation and commissioning of new milling equipment, a critical step for the plant to achieve full operational capacity, as rCB is its primary revenue generator.

Following the quarter's end, the company's main rCB client formally approved the product quality, leading to five consecutive purchase orders for multiple truckloads delivered between July and August. A separate US-based customer has also approved the rCB quality, with bulk purchase orders anticipated imminently.

Financially, Ecolomondo secured USD 1.5 million through private placements and finalised a significant agreement with Export Development Canada (EDC). This arrangement provides a temporary postponement of principal and interest payments on three existing loans, improving the company's working capital and investor confidence. This debt modification resulted in a gain of USD 2,495,209, which contributed to a reported net profit of USD 1,452,712, for the quarter, despite an operating loss, which stood at USD 1,042,497 for the quarter, compared to USD 443,418 for the same period of 2024.

Revenue saw substantial growth, increasing by 212 percent to USD 395,149 compared to the same period in 2024, driven by product sales and tipping fees at the Hawkesbury plant. Capital expenditures for the Hawkesbury TDP turnkey facility totalled USD 51,358,723 after accounting for depreciation, while the company’s cash and cash equivalents stood at USD 1,508,645. Over the coming 12 months, Ecolomondo anticipates utilising an additional USD 2.0 million, which will be primarily allocated to covering ongoing working capital requirements and essential capital purchases for the Hawkesbury facility.

The company also advanced its global expansion strategy, signing a definitive agreement with ARESOL, a renewable energy group, to construct four turnkey recycling facilities in the European Union. The first plant is planned for Valencia, Spain. At its Annual General Meeting, all management proposals were unanimously adopted by shareholders.

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The European Tyre and Rubber Manufacturers’ Association (ETRMA), alongside 13 other European business organisations, has signed a Joint Statement urging the European Commission to ensure a strong and ambitious implementation of the Data Act.

The coalition, including numerous SMEs and Small Mid-Caps from the digital and industrial sectors of European companies, has urged the European Commission to uphold the regulation against pressure to dilute its core provisions, identifying it as a crucial framework for unlocking industrial data across the EU economy. The signatories contend that a robust implementation is vital for fostering a competitive market and unleashing innovation, particularly for smaller businesses.

The coalition highlights the Act’s benefits, which include empowering SMEs with data portability rights, protecting them from unfair contractual terms and mandating that data sharing occurs on fair, reasonable and non-discriminatory (FRAND) terms. A key provision requires cloud providers to facilitate switching through open standards, combating vendor lock-in. The statement expresses concern that lobbying efforts for delayed enforcement, weaker interoperability definitions and reliance on global standards without fairness guarantees threaten to undermine these objectives.

For the Data Act to be effective, the coalition insists on full implementation to open data markets to genuine competition and prevent SMEs from being excluded by legal complexity. The statement also calls for a proportionate approach, requesting practical guidance, standard contractual clauses and well-resourced enforcement authorities to support smaller companies. It notes that in certain sectors, supplementary legislation may be needed for full clarity.

The coalition concludes that strong enforcement is paramount, asserting that without it, the Act's rights will remain theoretical. They warn that any delay or softening of key provisions risks reinforcing the very market barriers the regulation was designed to eliminate. The signatories urge the Commission to ensure robust enforcement to secure a competitive and innovative Single Market for all companies.

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The Yokohama Rubber Co., Ltd. has been selected as the official tyre supplier for the groundbreaking FIA Extreme H World Cup, the world's first hydrogen-powered motorsport series. The company will supply its GEOLANDAR brand of tyres for the championship, which is scheduled to commence next month in Saudi Arabia. The company will also continue to supply GEOLANDAR tyres for the Extreme E off-road electric vehicle series, which holds its final event on 4–5 October in Saudi Arabia.

Central to both the Extreme H and Extreme E series is a shared mission to advance sustainability and equality. The championships serve as dynamic platforms to promote environmental awareness and demonstrate cutting-edge technologies while also enforcing a strict mandate for gender parity by requiring each team to field one male and one female driver. The Extreme H series will feature eight international teams operating the Pioneer 25, a cutting-edge hydrogen fuel cell vehicle capable of generating 550 horsepower and accelerating from 0 to 100 kmph in 4.5 seconds. The global significance of this new championship is expected to draw a worldwide television audience across multiple continents.

As the predecessor to Extreme H, the Extreme E series utilised the high-performance all-electric Odyssey 21 vehicle. All teams competing in the new hydrogen series will also participate in this final Extreme E event, marking the conclusion of the electric championship as it transitions towards a hydrogen future.

In alignment with the environmental principles of these series, Yokohama Rubber will provide a specially developed prototype tyre based on its GEOLANDAR X-AT model. This tyre has been engineered with a significantly increased ratio of sustainable materials, comprising 38 percent renewable and recycled content. It has also been fortified with enhanced durability characteristics to withstand the unique demands of heavy hydrogen-powered and electric off-road racing vehicles.

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Hankook Tire is advancing its future mobility leadership through strategic open innovation and collaborative design projects. This effort was showcased at the company’s recent Design Innovation Day 2025, held at its Pangyo Technoplex headquarters. The event serves as a platform to present new solutions integrating sustainability, innovation and design while reinforcing partnerships with global technology leaders.

A major focus was the unveiling of two key outcomes from Hankook’s ongoing Design Innovation Project. The first was ‘Sustainable Concept Tyre’, an embodiment of the company’s ESG vision. Developed using advanced 3D printing technology, it is constructed from renewable and recycled materials. Its distinctive organic design was realised in collaboration with Harvestance using specialised engineering software.

The second reveal was the WheelBot 2, a multi-directional mobility platform developed with robotics startup CALMANTECH. This advanced robotic wheel system, equipped with tri-axial spherical tyres, demonstrates new possibilities for movement. Its potential was illustrated through a live demonstration of the PathCruizer, a two-seater pod concept powered by the WheelBot technology.

Beyond product reveals, the event highlighted Hankook’s commitment to knowledge sharing, featuring a presentation on 3D printing advancements from LG Electronics. These collaborations are central to Hankook’s strategy of strengthening its technology leadership. Since 2012, the company has partnered with world-renowned design universities and technology firms, consistently earning prestigious international design awards and solidifying the premium stature of its global brand.

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