India’s tyre industry is bracing for a tough fiscal year, weighed down by sluggish demand, volatile raw material prices and muted export growth. Revenue is forecast to expand just 7-8 percent – supported by modest price hikes and a marginal rise in volumes – marking a second straight year of single-digit growth. However, operating margins are set to contract sharply as natural rubber prices remain elevated despite recent moderation. In a wide-ranging discussion, Anuj Sethi, Senior Director at CRISIL Ratings, unpacks the factors shaping the sector, from price pressures and replacement demand to global headwinds and evolving trade dynamics.

How would you characterise the current fiscal year for the Indian tyre industry, considering its challenges and opportunities?

With volume expected to grow just by about 3-4 percent due to sluggish demand, overall revenue growth will remain in single digit for the second straight year, this fiscal. On the other hand, high raw material prices, especially of natural rubber, rose sharply over the past 12 months and have only recently begun to moderate. To a moderate extent, tyre manufacturers are increasing tyre prices in the replacement market to offset the impact of higher input prices, albeit operating profitability will still be impacted this fiscal.

The report mentions 7-8 percent revenue growth this fiscal year, supported by a 3-4 percent increase in realisations and volume. What specific factors could push growth beyond this forecast, and what risks might undercut it?

While realisation growth due to price hikes being undertaken by tyre manufacturers is a certain given sharp increase in natural rubber prices, higher than projected volume growth could take the growth higher than expected. With about 2/3rd of the domestic demand

coming from replacement segment, and it being the primary volume driver, any significant decline in that demand can impact the growth forecast other way.

Given that replacement demand is the primary volume driver, how do you assess the longevity of this demand surge in the context of evolving consumer preferences and vehicle usage patterns?

The replacement demand is expected to sustain over the medium term driven by the strong automotive sales achieved in previous fiscals.

With operating profitability projected to drop 300 basis points, what contingency measures are tyre makers considering beyond gradual price increases to mitigate this impact?

The price of natural rubber, which constitutes about half of the raw materials, continued to surge sharply in the first half of fiscal 2025. However, ability to pass on this increase is limited due to modest volume growth. Small price hikes and continued focus at improving operating efficiencies on an ongoing basis is another way to offset the impact to some extent.

Natural rubber prices have been highly volatile, reaching record highs and then falling to around INR 170 per kg. What is your outlook for natural rubber prices in the near to medium term, and what factors will likely influence their movement?

The sharp rise in natural rubber prices is due to a global shortage caused by inclement weather in major producing countries such as Thailand and Vietnam, which account for about half of the global production. Going forward, increase in supply with improving hectarage and slowdown in global economies is likely to drive correction in international rubber prices. In the last couple of months, some moderation in natural rubber prices has happened.

China has a surplus in crude oil-derived raw materials, including carbon black and other chemicals. Do you anticipate this surplus impacting global prices for these commodities, and how might Indian tyre makers benefit or face challenges as a result?

Share of natural rubber in tyre manufacturing is 47 percent, while carbon black accounts for ~20-22 percent. Should carbon black prices remain under control, it will benefit domestic tyre manufacturers.

Export growth is expected to remain muted at 2-3 percent. How does the current geopolitical climate, including sanctions or trade restrictions, further complicate Indian tyre makers’ access to markets in North America and Europe?

Export growth is expected to remain sluggish due to challenging business conditions in US and Europe. However, certain segments like off-the-road tyres are beginning to see better prospects as stocks with dealers are moderating. This could help players with presence in the off-the road- tyre segment.

Exports to key markets such as North America and Europe are under pressure due to economic challenges and unviable operating costs, leading to plant shutdowns in regions like US, Europe and Israel. Is the Indian tyre industry at risk of facing similar challenges, or does it have structural advantages that mitigate these risks?

Indian players are better placed compared to some of the western peers due to comparatively lower cost of operations, though operating profitability has come under pressure this fiscal because of higher imported rubber prices. Also, Indian players have flexibility to supply in small batch sizes unlike Chinese peers, and hence this also works to their advantage, more prominently in higher margin segments such as off-the road tyres.

Have tyre makers explored new international markets or alternative trade routes to counter supply chain disruptions and higher freight costs?

Not really; to circumvent the difficult environment around the Suez Canal, vessels are going around the Cape of Good Hope, adding 2-3 weeks and additional freight cost on exports. Some of the costs are being shared with the customers.

The report references Extended Producer Responsibility (EPR) regulations. How significant is the financial and operational burden of compliance for tyre makers, and what progress has been made in addressing this?

Adoption of EPR regulations is not expected to have a very sizeable impact on profitability, though it will lead to investments in strengthening processes and in technology.

Satish Sharma recently joined BKT as Senior President for Strategy and Business Development.

Sharma brings a rich experience of over three decades in the tyre industry.

Prior to this appointment, Sharma was the President spearheading Apollo Tyres’ operations across the Asia Pacific, Middle East, and Africa regions. Sharma oversaw key functions, including manufacturing, sales and marketing, customer relations, and regional profitability.

Sharma holds a bachelor’s degree in Chemical Engineering from the National Institute of Technology, Raipur, and a post-graduate diploma in Business Management from the Institute of Management Technology, Ghaziabad.

A veteran of India’s automotive sector, Sharma previously served as Chairman of the Automotive Tyre Manufacturers Association (ATMA).

Hans Beckhoff, Founder and Managing Director of Beckhoff Automation, was honoured for his entrepreneurial achievements on 29 January 2025 by German business newspaper Handelsblatt, KPMG and the Stiftung Familienunternehmen (the Foundation for Family Business) and inducted into the Hall of Fame for Family Businesses.

Beckhoff, 70, was honoured in front of more than 170 family business owners during a ceremony in Munich, Germany. For 45 years, he has maintained a high rate of innovation at his technological business, which is no small feat. Instead of being driven by the digital transition, he is driving it. He has also not lost sight of today's global issues, including climate change. According to Beckhoff's slogan, ‘Engineers must save the world’, sophisticated automation technology is crucial in this context since it establishes the groundwork for enhancing sustainability as well as energy and resource efficiency.

The company's technological inventions, many of which have established worldwide market standards in automation, have proven groundbreaking, substantiating its claim to be a pioneer in the field. The core Beckhoff philosophy of PC-based control technology, which leverages the vast development potential of the IT industry for industrial applications, is a perfect illustration of this. PC-based control, which Beckhoff introduced to the market in 1986 and is today essential in a variety of sectors, including the semiconductor, automotive and packaging industries, is where automation and IT meet. It is especially used for high-performance applications.

Another milestone is the bus terminal, fieldbus technology in terminal block format, which was introduced in 1995. This fundamental automation building block allowed for the implementation of strong, small, modular and finely granular control systems that were customised to meet specific needs. The ultra-fast EtherCAT communication technology, introduced by Beckhoff in 2003, has grown to become a crucial global standard for high-performance automation. Today, more than 8,000 businesses from all around the world support this intriguing technology as members of the EtherCAT Technology Group. Despite its reputation for inventions and revolutions, Beckhoff's system idea is still widely used. Today, Beckhoff technology handles all aspects of control tasks: from machine vision and control cabinet-free automation with a comprehensive hardware and software suite to modular I/O components, flexible drive technology, intelligent product transport and TwinCAT control software with artificial intelligence (AI) features, powerful industrial PCs, and EtherCAT.

The next generation has also benefited from Beckhoff's passion for automation and innovation, as seen by the fact that his children, Frederike and Johannes Beckhoff, have long held prominent roles within the business. As a result, Beckhoff Automation is still a family business 45 years after it was founded.

Kenda Tires has appointed Rebecca Karbon as its new Bicycle Sales Director for North America, the company announced.

Karbon, an industry veteran with extensive experience in the bicycle sector, will lead Kenda’s bicycle sales division, focusing on expanding market engagement and strengthening distributor and retail partnerships.

“We are confident that Rebecca’s expertise will further enhance our partnerships with long-lasting customers while maintaining our exceptional service you’ve come to expect from Kenda,” said Eric Yang, Vice President of Development at Kenda.

Karbon, who will be based in Minneapolis, said she looks forward to increasing brand engagement.

“I’m excited to join the Kenda team and look forward to increasing brand engagement with our distributor and retail partners,” Karbon said.

Call for Papers Now Open for Submissions

The Tire Society is set to host its 44th annual conference, focusing on sustainable innovation in the tyre industry, marking a significant shift towards environmental consciousness in a sector crucial to global transportation.

Scheduled for 23–25 September 2025 at the University of Akron, the conference will centre on the theme "Rolling Towards Sustainability: Tyres for a Greener Future", highlighting the industry's growing emphasis on environmental responsibility and technological advancement.

This year's event comes as tyre manufacturers worldwide face increasing pressure to reduce their environmental footprint and adapt to stricter regulatory requirements for sustainable production methods. The conference's focus on sustainability reflects the industry's response to global climate initiatives and changing consumer preferences.

Key Focus Areas:

• Sustainable materials development
• Optimisation and data connectivity for reduced emissions
• Regulatory compliance and industry collaboration
• Waste transformation strategies
• Circular design principles

The event traditionally attracts engineers and scientists from major tyre manufacturers, vehicle producers, academic institutions, and government agencies globally. Previous conferences have led to breakthrough developments in tyre technology and industry standards.

The conference is offering special opportunities for full-time students, including monetary awards for outstanding papers and poster presentation opportunities, demonstrating the industry's commitment to nurturing next-generation talent in sustainable tyre technology.

Selected papers from the conference will be published in the Journal of Tire Science and Technology, the industry's leading peer-reviewed publication, providing participating researchers and companies with opportunities to establish thought leadership in sustainable tyre development.

The call for papers is open until 3 March 2025. The Society is particularly interested in submissions addressing sustainable materials, performance optimisation, and emerging technologies in tyre manufacturing.