Tyre production in India declined in the first four months of this fiscal with products in all categories, except passenger cars, witnessing decline in output, according to Automotive Tyre Manufacturers Association (ATMA).
As per the latest data released by ATMA, passenger car tyres increased by 6.56 per cent in the April-July period this fiscal at 122.21 lakh units as against 114.68 lakh units in the year-ago period.
The second largest segment, medium and heavy commercial vehicles (M&HCV) tyres witnessed a decline of 1.6 per cent at 56.27 lakh units in the period under review, as against 57.19 lakh units in the April-July last fiscal.
Commenting on the trend, ATMA Chairman Raghupati Singhania said: "Tyre industry is passing through a difficult year as production growth is not only slackening but contraction is being witnessed across key tyre categories."
What is of greater concern is that fall in production in tyres is being witnessed even as automobile industry is coming out of recession, he added.
Expressing concern over heightened imports from China, Singhania said: "Massive surge in dumping of cheap tyres from China is meeting a significant domestic demand while domestic capacities are lying unutilised. This does not augur well for Indian manufacturing."
As per the ATMA data, light commercial vehicles (LCV) tyre production fell 11 per cent at 31.27 lakh units as compared with 35.19 lakh units in the year-ago period.
Tractor Front tyres saw a drop of 11.46 per cent at 9.73 lakh units in the April-July period as against 10.99 lakh units in the same period last fiscal.
Tractor Rear tyres production fell by 13.27 per cent at 7.32 lakh units as against 8.44 lakh units.
ATMA said tyre exports have also seen contraction during the period across key categories. Exports of M&HCV tyres were down by 5 per cent at 6,73,755 units as against 7,05,729 units in the same period last fiscal.
Passenger Car tyres have seen a much sharper drop of 18 per cent at 7,83,661 units as against 9,60,349 units exported in April-July period last fiscal.
"India is grossly deficient in production of natural rubber. There is no alternative to imports. A steep import duty of 25 per cent on natural rubber is leading to higher cost of production in India, impacting industry's competitiveness," Singhania said.
While there are stiff duties onimport of rubber as raw material, tyres can be imported at 5 per cent or even at nil rates of duty under various trade agreements. Tyre production in India is bearing the brunt of inverted duty structure and absence of a level playing field, he added.
