Tyre Industry

Topics: Automobile, Economics, International trade Pages: 3 (1018 words) Published: April 3, 2010

Tyre Industry In India

The origin of the Indian Tyre Industry dates back to 1926 when Dunlop Rubber Limited set up the first tyre company in West Bengal. MRF followed suit in 1946. Since then, the Indian tyre industry has grown rapidly. In the pre-Independence period, the tyre manufacturers were mainly foreign companies. Raw material in the form of natural rubber was easily available and labour was cheap. Sometime in 1956, based on the recommendations of the Tariff Commission, the Government encouraged domestic companies to set up their manufacturing facilities. A number of companies set up their plants in India, usually with technical support from foreign companies. Over a period of time the tyre industry was dominated by Indian players. After the onset of liberalization a few foreign companies entered India. However, they were not able to make a dent in the market share of Indian companies. Some foreign companies like Michelin, Continental Tyres and Pirelli are planning to enter India in the near future. Over the last few years, import of tyres into India from countries like China, South Korea and Thailand has been on the rise. The tyre manufacturers feel that due to the inverted duty structure foreign tyre manufacturers have an unfair advantage. The Indian tyre industry has grown over the last ten years. The reasons for growth are the robust growth of the economy and the automobile industry. Besides domestic growth, there has been a smart growth in the export of tyres also. The future is likely to see more growth in exports as the supply of natural rubber goes down. It is expected that the Indian tyre industry will have a very bright future. Transportation industry and tyre industry go hand in hand as the two are interdependent. Transportation industry has experienced 10% growth rate year after year with an absolute level of 870 billion ton freight. With an extensive road network of 3.2 million km, road accounts for over 85% of all freight...
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