Covid-19: Tyre companies face rising inventories, plan production cuts

The lifting of tyre stock from factories and transporting the same to auto manufacturers came to a grinding halt after the government announced a 21-day nationwide lockdown

As the demand for tyres has almost vanished during the lockdown, inventory kept with tyre manufacturers has risen to one months' worth of production — the highest ever — with producers working on strategies to reduce stockpiling, such as with production cuts.

Stock lifting from factories and transporting the same to auto manufacturers came to a standstill after the government announced a nationwide lockdown, effective March 25. Since then, tyre production continued, but with a minimum capacity of 20-25 per cent, there has been no offtake. Therefore, the entire quantity of production is stockpiled at the factory premises. In fact,