India Tyre Market Growth Analysis - Forecast Trends and Outlook (2024-2032)

India Tyre Market Size

The India tyre market reached a volume of nearly 190.54 million units in 2023. The market is projected to grow at a CAGR of 6.6% between 2024 and 2032 and reach a volume of around 339.37 million units by 2032.

India Tyre Market Outlook

• The automobile industry of India is a key contributor to the growth of the economy with a share of almost 6.4% of the country’s GDP and 35% of manufacturing GDP.

• MRF Limited, Apollo Tyres Limited and CEAT Limited are a few of the major companies in the market.

• The Indian tyre manufacturers are witnessing an increase in capacity utilisation driven primarily by the replacement demand. The replacement sector constitutes about two-thirds of tyre demand.

Figure: Automotive Production in India (in Million), 2018-2023

India Tyre Market Analysis

The demand for tyres is driven by the robust growth of the automotive industry. As the Indian population continues to grow, there is an increasing demand for personal transportation solutions, which has led to a rise in the number of cars, trucks, and motorcycles on the roads. The growing disposable incomes, along with the increasing youth population, are significantly contributing to the growth of the automobile sector, propelling the India tyre market value.

The Indian government is increasingly focusing on manufacturing products locally, supported by various schemes and initiatives. Government schemes such as Atmanirbhar Bharat Abhiyan- Self Reliant India, support the manufacturing of automobiles in the country and aim to make the country a manufacturing hub. This is creating a favourable environment for market expansion in the country. By 2030, the Indian government pledged to have 30% of new car sales in the country be electric.

Key Trends and Recent Developments

Expanding automotive production; rising demand for OEM tyres; increasing adoption of technologically advanced tyres; and surging adoption of EVs are favouring the India tyre market growth.

April 2023

Continental began the production of Tyre Pressure Monitoring System (TPMS) for passenger cars at its Bangalore plant.

April 2023

Michelin, the French multinational tyre manufacturer, announced its intention to manufacture passenger vehicle tyres in India to enhance its operations in the country.

April 2023

CEAT Limited, a prominent tyre manufacturer, opened a state-of-the-art Truck Service Hub in Gandhidham in partnership with Bharat Tyres Gujarat Pvt Ltd, a CEAT dealer.

Expanding automotive production

India’s production of tractors, buses, and two-and-three wheelers is significantly rising. This, coupled with the increasing opportunities for EVs, is likely to boost tyre demand.

Favourable government initiatives promoting automotive manufacturing

Favourable initiatives by the Indian government and automotive manufacturers such as the Automotive Mission Plan 2016- 2026 aimed at supporting domestic manufacturing are supporting the tyre industry growth in India.

Strong growth in the original equipment manufacturers (OEM)

Tyre manufacturers are observing higher demand from OEMs due to the improving macro environment. The OEMs in the Indian market are focusing on radicalisation across most vehicle categories due to the BS6 (Bharat Stage 6) norms mandated by the government for vehicles sold in India (in 2020).

Increasing adoption of technologically advanced tyres

Technological advancements such as the introduction of smart tyres installed with sensors or for EVs are further supporting the growth of the market.

Surging demand for electric vehicles

By 2025, the India EV market is expected to reach USD 7.09 billion. The government’s vision for electric vehicle charging infrastructure further boosts the demand for electric vehicles in India.

India Tyre Market Trends

India is the third-biggest automobile market in the world, the biggest producer of tractors, three-wheelers, and passenger cars, and the second-biggest producer of two-wheelers. In 2023, India produced 5.8 million automobiles in total, which also increased the market share of tyres in India. As the average age of vehicles on Indian roads increases, there is a growing demand for replacement tyres. This has been driven by the increasing awareness of the importance of tyre maintenance and safety.

Furthermore, India's EV finance sector is expected to grow to USD 50 billion by 2030, as per NITI Aayog and the Rocky Mountain Institute (RMI). According to industry reports, the EV market in India would increase at a CAGR of 36% until 2026. Along with companies exploring the rural markets, greater demand for logistics and passenger transportation has collectively boosted the India tyre market opportunities.

Industry Outlook

According to the Ministry of Heavy Industries, automotive production showed significant fluctuations between 2016-17 and 2021-22, which influences the India tyre industry revenue. Production peaked at 3.09 crores in 2018-19, followed by a decline to 2.27 crores in 2020-21, and slightly recovering to 2.29 crores in 2021-22. The share of automotive production in 2021-22 was dominated by two-wheelers, constituting 77% of the total production. Passenger vehicles accounted for 16%, while commercial vehicles and three-wheelers contributed 4% and 3%, respectively.

Based on ITC's Trade Map, in 2019, In 2019, India's imports of new pneumatic tyres, of rubber from the world amounted to $385,310 thousand. As per the Indian tyre industry analysis, this value decreased significantly to $205,713 thousand in 2020. In 2021, the imports slightly increased to $229,047 thousand, continued to rise to $265,421 thousand in 2022, and reached $310,224 thousand in 2023.

Imports from Japan were valued at $51,454 thousand in 2019, decreased to $49,970 thousand in 2020, and increased to $58,343 thousand in 2021. In 2022, the imports rose to $93,734 thousand and further to $94,704 thousand in 2023, fuelling the overall Indian tyre industry size.

China exported $89,626 thousand worth of tyres to India in 2019, which decreased to $42,109 thousand in 2020. The value increased to $44,445 thousand in 2021, rose to $50,619 thousand in 2022, and significantly increased to $82,152 thousand in 2023, influencing India tyre market.

Thailand's exports to India were $100,420 thousand in 2019, decreased to $48,250 thousand in 2020, and increased to $55,897 thousand in 2021. However, the imports dropped to $44,724 thousand in 2022 and further to $35,543 thousand in 2023.

The United States' exports remained relatively low, with $8,172 thousand in 2019, $8,173 thousand in 2020, and $5,259 thousand in 2021. The value increased to $12,997 thousand in 2022 and significantly rose to $33,696 thousand in 2023.

As per the India tyre industry analysis, Vietnam's exports to India started at $24,505 thousand in 2019, dropped to $11,281 thousand in 2020, and further decreased to $9,947 thousand in 2021. In 2022, the exports were valued at $4,865 thousand but increased to $13,581 thousand in 2023.

Germany's exports to India decreased from $10,983 thousand in 2019 to $5,395 thousand in 2020 which affected the future of tyre industry in india. The value increased to $10,966 thousand in 2021, dropped to $8,825 thousand in 2022, and slightly increased to $9,414 thousand in 2023.

Export from India of new pneumatic tyres, of rubber exhibited a dynamic trend from 2019 to 2023, with the total export value peaking at $2,691,778 thousand in 2021 before stabilizing at $2,681,032 thousand in 2023, according to ITC Trademap.

Factors Contributing to the India Tyre Market Growth

• Rising vehicle production and sales boost tyre demand.

• Growing presence of Indian tyre manufacturers in international markets.

• Surge in two-wheeler sales fuels India tyre demand growth.

Challenges Faced by Manufacturers in the India Tyre Market Share

• Fluctuating costs of rubber and other materials impact profitability.

• Elevated tariffs on imported raw materials and tyres increase production costs.

• Adhering to strict environmental norms and sustainability requirements adds to costs.

Key Growth Opportunities in the India Tyre Market

• Growing EV market boosts demand for specialized tyres.

• Increasing vehicle ownership in rural areas drives tyre sales, which, in turn, influences the tyre demand forecast.

• Demand for eco-friendly and fuel-efficient tyres provides new market avenues.

• Growing consumer preference for high-quality, premium tyres.

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India Tyre Industry Segmentation

India Tyre Market Report and Forecast 2024-2032 offers a detailed analysis of the market based on the following segments:

Market Breakup by Vehicle Type:

• Passenger Car

• Light Commercial Vehicle

• Medium and Heavy Commercial Vehicle

• Two Wheelers and Three Wheelers

• Off Road

• Others

Market Breakup by Design:

• Radial

• Bias

Market Breakup by Type:

• Tube

• Tubeless

Market Breakup by Tyre Size:

• Small

• Medium

• Large

Market Breakup by Price Segment:

• Low

• Medium

• High

Market Breakup by Distribution Channel:

• OEMs

• Replacement

Market Breakup by Region:

• North Region

• South Region

• East Region

• West Region

Two wheelers and three wheelers are expected to dominate the India tyre market share due to rising demand for personal mobility solutions

Rapid urbanisation, improvements in road infrastructure, and rising disposable income are increasingly leading to greater adoption of passenger cars in the country. In 2023, India produced 4.7 million personal vehicles.

India has the largest youth population in the world, around 66% of the total population (more than 808 million) is below the age of 35. A growing youth population in the country has contributed to the demand for two-wheelers. Additionally, two-wheelers provide the convenience of travelling through narrow roads, helping commuters reach their destination on time. The demographic dividend of India and rising demand for personal mobility solutions fuel the growth of the India tyre market.

The expansion of the mining and construction sectors is surging the demand for medium and heavy commercial construction and mining vehicles. In 2023, India produced 1.0 million commercial vehicles in total.

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Competitive Landscape

Major players in the India tyre market are increasing their collaboration, partnership, and research and development activities to gain a competitive edge

MRF Limited

MRF Limited, headquartered in India and founded in 1946, offers a diverse range of tyres catering to various types of vehicles, including heavy and light commercial vehicles, passenger cars, tractors, earthmovers, and motorsport vehicles. Some of its key brands include MUSCLE LIFT, STEEL MUSCLE, SHAKTI LIFE, SHAKTI SUPER, SUPER LUG, and SAVARI, among others.

Apollo Tyres Ltd

Apollo Tyres Ltd is a prominent player in the tyre industry, manufacturing and distributing quality tyres worldwide. Its product line includes several renowned brands such as ALNAC, AMAZER, APTERRA, ASPIRE, ALTRUST, MANCHESTER UNITED, and QUANTUM.

CEAT Limited

Headquartered in India and founded in 1858, CEAT offers a comprehensive selection of tyres suitable for all types of vehicles, ranging from heavy-duty trucks and buses to light commercial vehicles, earthmovers, forklifts, tractors, trailers, cars, motorcycles, scooters, and even auto-rickshaws. The company is committed to producing top-quality tyres for cars, bikes, and scooters.

JK Tyre & Industries Ltd.

Headquartered in India and founded in 1951, the company has introduced innovative 'Smart Tyre' technology in India, with Tyre Pressure Monitoring Systems (TPMS) and TREEL Sensors that enable real-time monitoring of a tyre's critical parameters, such as pressure and temperature.

Other key players in the India tyre market include Balkrishna Industries Limited, TVS Srichakra Limited, The Goodyear Tire & Rubber Company, Bridgestone Corporation, Continental Tyre Group Ltd, and Metro Tyres Limited.

Competitive Strategies by Key Players in the Indian Tyre Market

Research and development: Key players like MRF Limited and Apollo Tyres are two prominent market leader in tyre industry in india and invest heavily in R&D to innovate and develop new tyre technologies, ensuring they stay ahead in the market with products that offer superior performance and safety.

Market expansion: Companies such as CEAT Limited and Balkrishna Industries focus on expanding their market presence both domestically and internationally through strategic partnerships and by entering new geographies.

Product diversification: As per the India tyre market dynamics and trends, JK Tyre & Industries and TVS Srichakra emphasize diversifying their product portfolio to cater to various vehicle segments, including passenger cars, commercial vehicles, and two-wheelers.

Sustainability Initiatives: Apollo Tyres and Goodyear India are leading in adopting eco-friendly manufacturing practices and developing sustainable tyre products to meet the growing demand for environmentally responsible solutions which can influence the tyre market share in India.

Customer engagement: Companies like MRF Limited and CEAT Limited invest in strong customer relationship management and engagement strategies, including robust after-sales service and extensive dealer networks to enhance customer loyalty and aid India tyre demand.

Brand building: Major players such as Apollo Tyres and JK Tyre & Industries invest in branding and marketing campaigns to strengthen their market position and increase brand recall among consumers.

India Tyre Market Regional Analysis

North India is home to prominent tyre manufacturers that are seeking to expand their retail network in smaller cities and towns, to fulfil the growing demand for local services. Manufacturers are expanding their retail network in Northern India due to the increasing number of cars on the road and the demand for local services in smaller cities and towns, which aid the growth of the India tyre industry. For instance, in February 2023, JK Tyre Industries opened 6 new outlets in North India spread across Uttar Pradesh, Haryana, and Rajasthan, to improve its presence in rural areas.

In East India, the increasing car ownership in states like Sikkim and Nagaland is positively influencing the demand for tyres. According to industry reports, in 2022, Sikkim and Nagaland accounted for 20.9% and 21.3% of more cars than households in Delhi. The growing investments in states like West Bengal and the Northeast aim to address the supply-demand gap of natural rubber used for tyre manufacturing in India.

With ease of doing business in West Indian states like Gujarat and Maharashtra, manufacturers have been focusing on boosting their production capacities. Increasing investment by leading manufacturers for production expansion drives the demand of India tyre market.

Key Highlights of the Report

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India Tyre Market Report Snapshots

India Tyre Market Size

India Tyre Market Trends

India Tyre Companies

India Tyre Market Regional Analysis