All the three segments — construction and mining where the vehicles use the more expensive large tyres and passenger cars where premiumisation is benefitting demand for radial tyres — “could be big contributors in terms of value addition” for the tyre market, he told ET Wednesday on the sidelines of an automobile industry awards event.
Fuelled by road construction projects, sales of construction equipment are likely to close the year at 125,000-130,000 units, breaching the previous high of 107,779 units in FY23, ET reported on Tuesday.
Singhania expects the passenger vehicles market, which is likely to end the calendar year with record sales of 4 million units, to remain on the growth path and boost tyre sales. “The car segment is unlikely to cool off and will continue to grow. It’s likely to be 6-8% growth in FY24. When the base goes up, even a small increase in percentage terms helps,” he said.
To ride on the momentum, the market leader in truck and bus radial tires is embarking on an expansion. It has planned a capital expenditure of Rs 1,100 crore towards capacity expansion as well as maintenance of the existing infrastructure over the next two years.
Of this capex, Rs 530 crore will go into the expansion of passenger car radial capacity, which will go up 35% from the current 0.9 million tyres a year. It will spend Rs 236 crore for capacity expansion of truck and bus radial.JK Tyre is raising up to Rs 500 crore through a qualified institutional placement, which the company said opened for subscription earlier this week.The Indian tyre industry is on course to more than double its revenue to $22 billion by fiscal 2032 from $9 billion in fiscal 2022, the Automotive Tyre Manufacturer Association said earlier this year, citing estimates from Crisil Market Intelligence & Analytics.