Srikumar Krishnamurthy, Senior Vice-President and Co-Group Head, Corporate Ratings at ICRA

India’s tyre sector is moving into a steadier phase after cyclical tailwinds from GST-led formalisation and rural demand. Srikumar Krishnamurthy, Senior Vice-President and Co-Group Head, Corporate Ratings at ICRA, says replacement demand will continue to anchor growth in FY2027 even as original-equipment volumes soften. Premiumisation is lifting tyre makers’ realisations, though input volatility and competition cap pricing power. Export prospects are improving with new trade agreements, but regulatory risks and cost pressures persist as companies balance capex with discipline.

ICRA expects the Indian automotive sector’s wholesale growth to normalise in FY2027. How does this moderation in vehicle volumes translate into tyre demand across OEM and replacement channels?

The normalisation of wholesale volume growth in FY2027 follows a period of elevated growth in the second half of FY2026, which was driven largely by post-GST reform-led factors and favourable rural demand sentiments. The moderation in wholesale volume growth will consequently translate to a similar growth in OE segment. The aftermarket segment, however, will follow the inherent replacement cycle of different sub-segments and other fundamental factors.

Replacement demand currently anchors tyre industry growth. What level of growth do you expect in this segment going forward?

The replacement segment saw a robust growth in the last 4–5 months supported by the post effects of GST rate cuts and healthy rural demand following good monsoons and crop output. The current sentiments are favourable, with factors around economic activities, freight rate movement and farm output reflecting optimistic picture. The segment is likely to outperform the OE segment in FY2027 supported by inherent factors like replacement cycle, safety awareness and regulatory forces.

Premiumisation is evident in vehicles and tyres alike. How is the shift towards larger rim sizes, radialisation and higher-value products shaping revenue growth versus volume growth in FY2026–27?

A change in product mix has been observed in recent times. Rising preference for utility vehicles, premium bikes and electric vehicles have resulted in changes to the average selling price (ASP) of tyre makers. While these elongates the product replacement cycle over time, higher share of sales of large rim sizes and high-performance tyres results in premium pricing and value growth. That said, pricing pressure because of competition and movement in input prices restricts the premium to an extent, in certain segments.

What impact do you expect from the evolving trade agreements between India and United States, along with the proposed India-EU free trade deal, on tariffs for tyres produced and exported from India?

US and Germany are the top-two destinations for Indian tyre exports. Overall, tyre export volumes grew by around 10 percent in FY2025 and around eight percent in H1 FY2026. The recent signing of India-UK and India-EU deals is a positive as Indian tyres are increasingly getting exported to these regions in recent period, reflecting better acceptance. While the developments on India-US tariff-related aspects are a positive, stability in tariff reforms will be critical towards better visibility of exports.

With exporters pivoting towards Europe, Africa and Latin America, what competitive or regulatory barriers might Indian tyre makers face in these markets over the next 12–18 months?

The prospects of Indian exporters remain vulnerable to the regulatory actions and competitive forces. The US tariff-related developments have made tyre makers in

South-East Asia and China more competitive (as compared to India), although the changes in tariff rates is a positive development for Indian exporters. While a depreciating rupee was beneficial, the recent capping of RodTEP benefits is a negative impacting the competitiveness of Indian tyre makers.

Natural rubber prices have remained elevated and volatile. How do you expect raw-material cost trends to evolve in FY2027, and what does this imply for tyre company margins and pricing power?

Rubber prices largely track the demand-supply factors. The prices have largely been volatile in recent years and were affected by a relatively subdued consumption globally. While the supply will remain influenced by weather and other related factors, the global tyre demand is likely to be relatively better, thus keeping the prices firmer in the coming year.

Beyond rubber, inputs such as carbon black and crude-linked derivatives are cyclical as well. Are tyre manufacturers adequately positioned to manage input volatility through sourcing strategies or pass-through mechanisms?

To protect the margins, tyre makers have resorted to better production planning, maintaining optimal inventory and altering the sourcing strategies. That said, the earnings profile of tyre makers remains exposed to any sharp volatilities in input prices, especially replacements.

Industry capex has remained steady, focused on radial capacity and premium segments. Do you foresee a new investment cycle in FY2027–28, or will companies prioritise balance-sheet discipline amid demand normalisation?

The industry’s capex spends are estimated at 8–10 percent of revenues with sizeable investments towards expansions in passenger vehicles and trucks and bus tyres, along with continued focus on debottlenecking, maintenance and R&D activities.

Looking beyond demand and costs, what are the most significant structural challenges facing the Indian tyre sector over the next three to five years – technology shifts, sustainability mandates or global competition?

Multiple trends are emerging in the auto industry, like vehicle premiumisation, changing powertrain mix, fluctuation in adoption of EVs across different product segments etc. In this backdrop, and coupled with global geo-political uncertainties and climate changes, tyre makers face challenges around business strategies. Strengthening technological capabilities, investments in premium performance tyres, enhanced usage of AI for operations, streamlining supply chain activities and diversification are the likely key focus areas for Indian tyre makers.

Gaurav Kumar has resigned as a whole-time director of Apollo Tyres, the Indian tyre manufacturer, after more than two decades with the company, though he will remain chief financial officer during a transition period.

The Gurugram-based company's board approved the resignation at a meeting on Thursday. Kumar steps down as a director, and consequently as a member of the risk management committee, with effect from the close of business the same day. The company said he had confirmed there was no material reason for his departure beyond that stated in his resignation letter.

Kumar will continue as chief financial officer for such period as is necessary to ensure a smooth transition, after which he will cease to be part of the company's senior management.

In his resignation letter, Kumar said: "It has been terrific to be part of the incredible journey at Apollo Tyres thus far. I have learned, and hopefully contributed in equal measure, and now seek to explore alternative and new challenges. I wish Apollo Tyres the very best for the journey ahead and will always be part of the Apollo Tyres Family." He added that he was grateful to Onkar Kanwar and Neeraj Kanwar for their support during his tenure of more than 22 years at the company.

Neeraj Kanwar, Vice-Chairman and Managing Director, said: "Gaurav deserves kudos for the critical role he has played in the growth of Apollo Tyres, both in India and overseas, in the last twenty years. While we do regret losing him, we are conscious of his personal aspirations and wish him the very best in his future endeavours."

The company said it was in the process of appointing a new chief financial officer.

Shrader Tire & Oil (STO) has announced the appointment of Bob Feldbauer to the role of President, effective 1 August 2026. He will concurrently serve as Chief Operating Officer, while Joe Shrader maintains his position as Chief Executive Officer.

Feldbauer’s ascent follows his arrival at STO in early 2025 as Chief Operating Officer, a role built upon a robust industry resume. His prior engagements include a lengthy stint at the helm of Jack’s Tire & Oil in Utah and a substantial period with Michelin North America, where he handled sales and managerial assignments.

Under the new structure, Feldbauer’s purview widens to encompass both internal fleet management across 14 sites and outward-facing commercial development, including alliances and market expansion. With the founding family’s fourth generation now active within the firm, the succession plan reinforces the enduring principles established when the company opened in 1948.

Shrader said, “Bob has proven exactly what we hoped he would when we brought him on board – sharp operational instincts and a real drive to help this company grow. Putting him in the President seat lets us move faster on the growth plans we’ve been building towards.”

Feldbauer said, “It has been a fast year and a half at Shrader Tire & Oil. I have gained tremendous insight and valuable knowledge about our organisation’s structure, company culture and an understanding of our overall goals and commitments. One thing is clearly obvious – the commitment Shrader employees have to deliver the best customer experience each and every time. I appreciate this and look forward to supporting them as their President and COO.”

Balkrishna Industries Ltd. (BKT) has unveiled a brand installation at the Mumbai International Airport Limited (MIAL) T2 Elevated Road Underpass as the tyre manufacturer seeks to broaden its positioning beyond its traditional Off-Highway business and strengthen awareness of its expanding on-highway portfolio in India.

The 2,000 sq. ft. installation, inspired by the company's "Elevate Your Drive" philosophy, highlights BKT's portfolio across agriculture, construction, mining, earthmoving, commercial vehicles, two-wheelers and passenger vehicles. The activation comes as the company expands its presence in India's two-wheeler and commercial vehicle tyre segments.

Designed to move beyond conventional outdoor advertising, the installation features nine illuminated tyre-shaped displays, each 8 feet in diameter, using the tyre itself as the central storytelling element. It opens with a large-format visual featuring BKT brand ambassador Ranveer Singh, followed by a sequence of displays illustrating the company's expanding mobility portfolio. The installation will remain at the airport for 24 months.

Mumbai International Airport handled a record 55.5 million passengers in 2025, providing the company with sustained visibility among business travellers and consumers.

"For BKT, innovation goes beyond product engineering; it extends to how we tell our story. This installation reflects a simple yet powerful idea: our tyre itself becomes the medium through which travellers experience the breadth of BKT's world. As we expand our presence across India's mobility landscape, it is important that consumers see BKT not through a single product category, but as a brand that supports movement across diverse terrains, applications and journeys. Mumbai Airport provides an ideal stage for us to express that transformation in a memorable and distinctive way," said Satish Sharma, Senior President & Director – Business Development and Strategy, BKT.

The installation was conceptualised by Infectious Advertising and uses immersive design, sequential storytelling and its airport location to showcase the company's wider mobility portfolio. According to BKT, the activation is intended to connect its established Off-Highway business with its growing presence in India's on-highway mobility market.

Mumbai-headquartered leading carbon black manufacturer Epsilon Carbon has reported a 10 percent reduction in carbon dioxide equivalent emissions across its upstream transportation operations during FY2025–26. The reduction was achieved through the deployment of an electric and liquefied natural gas freight fleet.

An independent third party certified the emissions data. The reductions achieved in transport logistics equate to carbon absorption figures associated with approximately 29,000 trees. The verified figures allow supply chain partners to include these reductions within Scope 3 emissions reporting frameworks and environmental disclosures.

Gaurav Mathur, Chief Executive Officer, Epsilon Carbon, said, “Decarbonising logistics is central to our climate strategy. What makes this milestone meaningful is that the results are independently verified with a 10 percent reduction in CO2e emissions within the upstream transportation category over a single financial year, driven by the adoption of electric and LNG fleets. These carbon reductions strengthen our own sustainability disclosures and those of our customers, and we intend to scale this model across our supply chain.”

Following Phase 1 operations, Epsilon Carbon intends to expand the number of electric and LNG vehicles in its transport fleet during FY 2026–27 to scale low-carbon freight transport across its supply chain network.