Indian tyre manufacturer grapples with Mexico subsidiary challenges whilst accelerating capacity investments and EV market push

JK Tyre and Industries Ltd is confronting significant trade headwinds in its Mexican operations whilst pressing ahead with ambitious expansion plans and positioning for India’s electric vehicle revolution, senior management revealed recently during the company’s quarterly review.

The Delhi-based manufacturer’s Mexican subsidiary, JK Tornel, has been severely impacted by uncertainty surrounding US trade policies. Management acknowledges operational disruptions despite recent clarifications on tariff structures.

Tariff Turbulence Hits Mexico Operations

According to Arun K Bajoria, Director and President International, JK Tornel faced considerable challenges throughout the financial year as shifting US trade policies created market uncertainty.

“There was complete uncertainty in Mexico, supplying to the US because of the Trump tariff; there was no certainty and every time, the dates were sort of getting shifted,” Bajoria explained. “So there was a complete uncertainty in the minds of the customers based in the USA.”

The Mexican subsidiary, which derives approximately 60 percent  of its revenue from domestic markets with the remainder split between exports to the United States and Latin American countries, has been forced to recalibrate its strategic focus.

“Our strategy now is increasing our sales to the domestic market, that is number one, and also to Brazil market and then to Latin American markets,” Bajoria said, outlining the company’s response to trade uncertainties.

Recent policy clarifications have provided some relief, with automobile tyres continuing to benefit from zero-duty exports from Mexico to the United States. However, management acknowledged that customer confidence remains fragile.

“This clarification has been ascertained recently. So, the on-the-ground in terms of the US customers is still sleeping in, and we have communicated the notifications, etc., to them,” Bajoria noted.

Major Investment Programme Gathers Pace

Despite external challenges, JK Tyre is accelerating its capacity expansion with ongoing projects worth INR 14 billion across passenger car radial (PCR), truck and bus radial (TBR), and all-steel light truck radial segments.

Managing Director Anshuman Singhania confirmed that capacity utilisation levels remain high across all plants. The company operates 11 manufacturing facilities globally and produces over 35 million tyres annually.

“The projects which we have already been implementing are on track, and we will have the capacities available from these projects in this financial year 2026,” said Chief Financial Officer Sanjeev Agarwal, indicating capital expenditure of approximately INR 9 billion planned for the current fiscal year.

In Mexico, a separate US$27 million passenger car radial expansion project is progressing. It specifically targets larger rim size tyres to enhance revenue and profitability potential.

Electric Vehicle Market Push Intensifies

The company is aggressively positioning itself in India’s rapidly expanding electric vehicle segment, where it has established dominant market positions across multiple categories.

“We enjoy almost 70 percent market share across all OEMs. We are also supplying tyres in the replacement market,” Singhania said, highlighting supply relationships with leading manufacturers, including Tata Motors, Ashok Leyland’s Switch Mobility, JBM, and Eka Mobility.

The electric bus segment currently contributes 7 percent of India’s total bus industry, with projections indicating growth to 10 percent driven by government policy interventions. In the last-mile connectivity segment for small commercial vehicles, JK Tyre commands a 50 percent market share with Tata Motors’ electric variant.

The company is also expanding its presence in the two—and three-wheeler electric segment, supplying prominent manufacturers such as Ola Electric, Ather, and Pure Electric.

“By 2030, we are estimating around 1.33 million units, which amounts to 20 percent of the passenger vehicle production in the country,” Singhania projected for electric passenger vehicles.

Strategic Market Response

Management indicated that raw material price stabilisation is providing operational relief, and despite ongoing global volatility, the company expects continued stability over the coming quarters.

The company’s diversified geographical footprint, with subsidiary operations including Cavendish Industries contributing significantly to consolidated performance, is helping mitigate regional market challenges.

“We believe the US tariff in the medium to long term is unlikely to have a significant impact on the auto sector and the tyre industry,” Singhania said, expressing confidence in the company’s strategic positioning despite near-term uncertainties.

The ongoing scheme of amalgamation between subsidiary AIL and JK Tyre has received regulatory approval from SEBI and awaits final clearance from the National Company Law Tribunal, which is expected to further streamline operations.

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In a significant strategic expansion, Point S, one of the world’s largest independent tyre and automotive service networks, has introduced its first proprietary line of truck tyres. The official launch occurred at the Solutrans exhibition in Lyon, representing a major advancement in the company's deep involvement with the commercial vehicle industry. Already a well-established force in the truck tyre markets of Europe and North America, Point S is leveraging its expertise to introduce the Point S Tyres Truck range. This initiative is seen as a disruptive move in the international sector, extending the group's reputation for quality and its independent ethos to a wider base of transport professionals.

The comprehensive range consists of eight key sizes, all certified with the Three-Peak Mountain Snowflake (3PMSF) symbol, guaranteeing reliable winter performance and year-round usability. Two notable products within the line are the Mixed Service tyre, designed for extreme conditions with optimised durability and stone penetration resistance, and the Regional Haul tyre, noted for its versatility, robustness and full 3PMSF certification across all sizes. Production for these tyres will be handled by a premium truck and bus radial manufacturer based in Poland and Turkey. A key logistical benefit for Point S members is the ability to combine orders from both production facilities into a single shipment, enhancing ordering flexibility and overall supply chain efficiency.

This new private label range is engineered to provide long-lasting value for independent retailers, featuring high-performance solutions that are both regroovable and retreadable. By moving into the truck tyre segment, Point S now offers its global network of members a complete portfolio that previously included only passenger and premium tyres. This empowers members to more effectively and competitively serve fleet operators and other clients with a compelling price-to-performance ratio.

Fabien Bouquet, CEO, Point S International, said, “This launch represents a key step in our journey to support our members and their customers with complete mobility solutions. Transport professionals need tyres that deliver performance, durability and value, which is exactly what this range delivers. It also marks an important milestone in our long-term strategy to strengthen our position in the commercial vehicle sector and to bring more innovation, choice and independence to the truck tyre market.”

Emilie Faure, International Private Labels Product Manager, said, “From the outset, our goal has always been to replicate the strategy and success of our Point S Tyres passenger car range by extending it to the commercial vehicle market with the launch of Point S Tyres Truck. To support this development, we involved selected Point S members and some of our small and medium-sized fleet clients from various countries to test the product. Initial feedback has been extremely positive, with testers particularly impressed with the range’s performing, as well as its quality and competitiveness in real-world operations.”

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According to Tyres Europe's sales data for the Q3 and the first three quarters of 2025, the overall tyre market has demonstrated general stability. Adam McCarthy, the organisation's Secretary General, reported that despite this, demand for Truck and Bus tyres has remained persistently weak. Cumulative figures for the year so far indicate that total tyre volumes are lower than those recorded during the same period in 2024.

Within the Consumer segment, third-quarter sales were stable, yet they reflect a slight decrease for the year to date. A notable trend is the shifting consumer preference away from summer tyres and towards all-season and winter products. The Truck and Bus segment experienced a continued decline, with the year's sales also down slightly, a situation attributed to regional economic softness and a rise in tyre imports. Meanwhile, the Agricultural tyre market saw stable volumes in the quarter, though they remain significantly below pre-pandemic levels.

The full Quarterly Update, prepared by Astutus Research, is available for download on the Tyres Europe website.

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Goodyear India reported a decline in quarterly profit as softer demand and higher expenses offset modest revenue growth, while the company announced board changes and new senior management appointments.

The tyremaker’s standalone profit after tax fell to INR INR 134.7 million for the quarter ended 30 September 2025, down from INR 143.1 million in the same period last year, according to financial statements approved by the board.

Total income for the quarter edged up to INR 5.8441 billion from INR 5.6835 billion a year earlier, though margin pressures persisted.

Profit before tax for the quarter stood at INR 180.7 million , down from INR 195.1 million in the previous year, reflecting higher input costs and muted replacement demand. Performance in the half-year to September also trailed the prior period, with profit after tax at INR 317.6 million compared with INR 363.7 million last year.

Alongside the earnings announcement, Goodyear India disclosed several board changes. Varsha Chaudhary Jain tendered her resignation as Whole-Time Director, effective 31 December, citing personal reasons. Rajiv Lochan Jain will complete his second term as Independent Non-Executive Director on the same date.

The board has approved the appointment of Gajanan Vithal Gandhe as an Independent Non-Executive Director from 1 January 2026 for a five-year term, subject to shareholder approval. The company stated that he “is not debarred from holding the office of a Director by virtue of any order passed by the Securities and Exchange Board of India or any other Authority.”

Goodyear India also designated three senior executives as Key Managerial Personnel for determining material events under SEBI’s disclosure rules from 1 January: Arvind Bhandari, Chairman and Managing Director; Sandeep Garg, Whole-Time Director and CFO; and Anup Karnwal, Company Secretary and Compliance Officer.

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MRF, India’s largest tyre manufacturer, reported higher quarterly earnings as easing raw material prices offset the seasonal weakness in domestic demand, even as exports held up against tariff pressures.

The Chennai-based group said consolidated total income rose 7 percent year on year to INR 74.87 billion for the three months to 30 September, compared with INR 69.94 billion in the same period last year. Consolidated profit before tax increased to INR 6.99 billion from INR 6.31 billion, while net profit climbed to INR 5.26 billion from INR 4.71 billion.

The company attributed the improved bottom line to “softening of raw material prices”, according to a statement released after its board meeting on 14 November.

Sales in the second quarter are typically slower because of the monsoon season, a trend the company noted once again. Even so, original equipment demand “continued to have a strong double digit growth” and exports “performed well despite tariff issues”. MRF added that the government’s mid-quarter announcement of a reduction in goods and services tax had briefly damped replacement sales, though it expects the revised rate to support volume growth in subsequent quarters.

The board declared an interim dividend of INR 3 per share for the financial year ending 31 March 2026.

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