Expected to witness a swift recovery in financials during the second half of the fiscal on the basis of a recovery in Indian operations and continued expansion in the European market, Apollo Tyres has reported a 270.5 per cent year-on-year increase in consolidated net profit of Rs.289 crore for the quarter ending 31 March, 2021. It is bullish about a possible recovery in commercial vehicle sales after almost two-and-a-half years. Said to spend on maintenance of plants; on digitisation initiatives, and infrastructure, the leading CV tyre maker is well-poised to cater to the rise in demand. With the annual maintenance capex claimed to be in the region of Rs.200 to Rs.250 crore, Apollo Tyres is said to be ramping up its Andhra Pradesh plant as per its second phase of expansion. It is expecting to hit a planned capacity of 50,000 passenger car radials per day and 3,000 truck-bus radials per day at the respective plant by March 2022, according to sources with knowledge of the development. Known to have 90 per cent TBR utilisation level in the last quarter of FY2020-21, Apollo Tyres, mentions sources, got a nod to re-start its Kerala (Perambra) plant from the local authorities starting May 21, 2021. This plant should help the company to reduce any bottlenecks it would be facing, inform sources.

Announcing a fresh investment of Rs.1200 crore towards expansion of truck and bus radial capacity (at its existing plant at Halol and brownfield facility at Chennai), Ceat Tyres experienced good growth in the last quarter of FY2020-21. Buoyed by good market response, the company, state sources, has decided to invest half of Rs.1200 now and the rest once the market prospects become stronger. Lining up a capex of Rs.1000 crore in FY2021-22, the tyre maker, keeping a tab on financial efficiency as challenges like increase in commodity prices emerge, is keen to increase its share of the TBR market. With the commodity challenge said to erode gross margins and prompt Ceat Tyres to take a small increase in price, the company is watching closely the effect of pandemic on urban and rural market sentiments. As frequent lockdowns and high commodity prices lead to industry-wide concerns, the company in claimed to examine its production strategies. Said to evaluate re-calibration of production on the lower side, Ceat Tyres, in an effort to support its customers, has extended the warranty period on its range of tyres by another three months. The warranty extension by three months is applicable for products whose standard warranty is expiring between April 01, 2021, to June 31, 2021.


Either contemplating or carrying out a price increase on the back of rising input costs, tyre makers in India continue to be optimistic of the market picking up sooner than later. Especially confident of good medium to long term industry prospects, they are investing in modernising their infrastructure and processes; in eliminating any bottlenecks and preparing themselves to a rebound in demand over time. With the government kicking off the process to bring a new regime for tyres used in cars, mini bus and heavy vehicles to improve fuel efficiency, safety and noise reduction, tyre makers in the country are confident of meeting the respective regulations. Claimed to come into effect from October 2021, the new norms are expected to change the market outlook for tyres as a commodity, and as a service. Tackling pandemic-induced short term disruptions like plant closures and possible low tyre sales, tyre makers like JK Tyre seem undeterred. Announcing recently a spend of Rs.200 crore in FY2021-22 towards plant maintenance and debottlenecking, the leading tyre maker reported a four-fold increase in standalone net profit at Rs.194.96 crore in the last quarter of FY2020-21. Keeping tab of the increasing raw material prices that has already brought to it the prospect of pushing the prices of tyres up, the company is re-visiting its strategies to ensure efficiency as well as the well-being of its employees.

Drawing attention to increasing raw material costs pushing cost inflation pressure up, sources explain that JK Tyre is keeping a close watch on market as well as supply-chain side changes. They add that cost inflation pressure is expected to continue for at least the first quarter of FY2021-22. Looking at calibrated price hikes, premium-isation of products, operating leverage gains and capacity debottlenecking, JK Tyre, with 12 manufacturing facilities and 32 million tyre capacity, is stressing on sustainability and operational efficiency. The possible closure of synthetic rubber and tyre plants in the country hinting at a pandemic-induced disruption even though of short term nature, the tyre industry in India is treading a cautious path. It is especially paying attention to the safety and well-being of their employees in such trying times. Losing their executives and workers to the pandemic – Michelin India head Mohan Kumar succumbed to Covid-19, the Indian tyre industry is coming to terms with a new normal that is touching almost every aspect of its functioning. With the Government imposing import curbs, a big change in the happening is the loss of traction by ‘imported’ tyre brands like Falken and Hankook. Uneconomical for overseas tyre brands to operate in India after the roll-out of the import curbs, companies like Falken Tyres (Japan) have announced post reduction in their operations and tyre varieties or brands. Falken Tyres, in particular, has announced that it will operate henceforth in only four cities in India – Delhi, Ahmedabad, Ludhiana and Jalandhar.

The contract manufacturing arrangement of Falken Tyres with Apollo Tyres in India not fructifying, the company is said to be examining its India strategy in the wake of the new development. With the import of vehicle tyres moved into the restricted category in June last year to prevent dumping of cheap imports, mainly from China, by the Government, South Korea’s Hankook is claimed to have already wound down its own dealer network in India. Mention sources, that some USD 274 million worth of car, commercial vehicle and two-wheeler tyres were imported in FY2019-20. They cite data from the Department of Commerce

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