By Denna Bowman
Tyres manufacturers in India are expected to start investing heavily to meet product demand during the coming year, according to industry experts.
A healthy pick up in demand in auto sector in the face of a visible economic recovery is likely to have the knock-on effect of boosting growth in the country’s tyres industry by around 7-8 per cent in FY11.
Also, in line with the pick up in business growth, tyre companies are likely to make significant increase in their capex plans in 2010-11, to expand capacity and meet product demand, key plays forecast.
A S Mehta, director of marketing for JK Tyre & Industries, told the Press Trust of India: “The Indian tyre industry may grow at around seven to eight per cent at Rs 27,000 crore in the next financial year from Rs 25,000 crore presently, on the back of a high demand in the the automobile sector.”
JK Tyres, which is one of the leading players in the domestic market, is targeting a growth of 20% during the coming year. It has chalked out an investment plan of Rs1,200 crore over the next two years to expand production in its car and truck radial segment.
Mr Mehta said: “Year 2010 is going to be a happening year for us. We plan to invest Rs1,200 crore over the next two years to increase car and truck radial production in India.”