Buoyant Automotive Market Drives Growth in the Indian Tire Aftermarket

DUBLIN, Ireland--Research and Markets (http://www.researchandmarkets.com/reports/c49289) has announced the addition of the Frost & Sullivan report: Indian Tire Aftermarket to their offering.

This Frost & Sullivan research service titled Indian Tire Aftermarket provides a detailed analysis of the various factors driving and restraining this market. It also provides in-depth coverage of the passenger vehicle, CV and two/three-wheeler segments. Key factors and issues that have an impact on the market such as radialization, imported tires, distribution structure, and pricing trends are discussed to give a clear picture on the expected development of this market.

Technologies

The following technologies are covered in this research:

-Bias tires

-Radial tires

-Radial tubeless tires

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

-Passenger vehicle tire aftermarket

-Commercial vehicle tire aftermarket

-Two/ three wheeler tire aftermarket

Summary

Buoyant Automotive Market Drives Growth of the Indian Tire Aftermarket

The Indian tire aftermarket is experiencing significant growth due to a combination of factors such as high vehicle sales across all categories, increasing industrial activity, and rising rates of radialization. India is home to a huge and aspirational middle class population that has easy access to convenient financing options, making the ownership of vehicles well within the reach of a growing number of people. India’s vehicle population grew at an average of 10.5 percent per annum from 2000 to 2005, which in turn, positively impacted the tire aftermarket. At the same time, rising industrial activity has led to greater demand for commercial vehicles (CVs) to transport raw materials and finished goods. Demand for tire replacement in this segment is likely to be particularly high due to pervasive problems such as irregular loading patterns and poor vehicle maintenance.

"Improper vehicle maintenance and excessive loading of CVs are major drivers of the Indian tire aftermarket," notes the analyst of this research service. "While the former has a detrimental effect on the tire and shortens its life, the latter causes irregular tire flexing and excessive heat generation within the tire, ultimately leading to tire failure." However, the popularity of retreadable tires in the CV segment could pose a significant challenge to tire manufacturers on the replacement front. Fleet owners and State Transport Corporations (STCs) that own and run the majority of CVs in India tend to purchase tires that can be effectively retreaded more than once. The impact of rereading is considerably lower in the passenger vehicle and three-wheeler segments.

Immense Potential of Radialization to Expand beyond Current Low Levels Augurs Well for Tire Aftermarket

"The true potential of the Indian tire aftermarket is yet to be tapped due to the insufficient levels of radialization in the CV segment," says the analyst. "In 2005, commercial vehicles tires accounted for 12.5 percent of the total unit sales, with only 2.0 percent radialization in the heavy CV (HCV) segment and 11.0 percent in the light CV (LCV) segment." In contrast, the 90.0 percent of passenger car tires in 2005 were radials, and this is expected to reach 96.0 to 98.0 percent by 2012. Increased levels of radialization in the CV segment, similar to those of the passenger vehicle segment, could lead to tremendous revenue gains due to the higher prices of radial tires compared to cross ply tires.

The preference for cross ply/bias tires in the CV segment in India is higher because they are retreadable and hence, more cost effective for vehicles subjected to overloading and bad road conditions. Despite the benefits offered by radial tires such as longer life, lower fuel consumption, and improved safety and ride quality, the fact that they are 25.0 percent more expensive than bias tires is a major deterrent. Moreover, an appropriate technology for retreading radial tires is currently not available, whereas bias tires can be retreaded twice in their lifetime. However, several state governments have started mandating regular checks on CVs to prevent overloading, while the construction of toll roads and privately-built and operated highways will also help curb this trend. This could lead to declining demand for bias tires in the CV segment, which were preferred primarily for their ability to perform well even when overloaded, and set off a positive growth trend for radial tires.

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