• Domestic tyre volume growth to slow to 4-6 percent in FY2025 due to a high base and subdued commercial vehicle demand.
• Replacement market to remain stable, supporting overall volume expansion.
• Tyre exports to see low single-digit growth after contracting in FY2023.
• High natural rubber and crude oil prices to squeeze margins by 200-300 basis points in FY2025.
• Investments in new capacity to be moderate due to adequate existing capacity and a modest demand forecast.
• Focus on debottlenecking, digitalisation, and R&D for sustainable and smart tyres.
• Organised tyre retreading to grow at a CAGR of 7-9 percent on rising environmental focus and government support.

Domestic Growth to Ease

According to ICRA, India's tyre industry is expected to moderate domestic volume growth in FY2025 due to a high base effect and subdued demand from the commercial vehicle segment. However, healthy replacement market demand and growth in original equipment manufacturer (OEM) sales for passenger vehicles and two-wheelers are expected to partially offset this slowdown.

Nithya Debbadi, Assistant Vice President and Sector Head, ICRA, said: “Tyre exports are expected to remain moderate in the near term because of muted demand growth in key export destinations, namely the US and Europe. Further, supply chain issues arising from the Red Sea crisis have raised freight costs (resulting in increased cost of tyre) and elongated transit times. In terms of domestic factors, despite an elevated base, consumer segments are expected to record a mid-single digit growth (PV at 4-6 percent, 2Ws at 5-7 percent), on the back of healthy underlying demand. However, growth in the CV segment is expected to be impacted by the brief pause in infrastructure activities because of the Parliamentary Elections, with the Model Code of Conduct, which is in force because of the Parliamentary elections, and the impact of high base. Tractor demand growth is expected to be supported by the forecast of above normal monsoons, aiding rural cash flows.”

ICRA expects the replacement market, which contributes to over two-thirds of the industry volumes, to remain stable, aided by healthy demand across the segments. Tyre export volumes, which contribute approximately 25 percent of the industry’s sales (by value), are estimated to have recorded a low single-digit growth in FY2024 after contracting by around seven percent in FY2023, owing to demand shrinkage in key markets amid inflationary pressure and higher interest rates.

 “After a strong growth in two consecutive years, the tyre industry’s revenue growth (consolidated for ICRA’s sample set of seven leading tyre manufacturers) is estimated to have moderated to mid-single digits in FY2024 with estimated domestic volume growth of 6-8 percent, flattish realisations and subdued exports. For FY2025, the industry revenues are expected to grow by 5-7 percent, primarily driven by domestic OEM and replacement segments,” added  Debbadi.

Margins to Contract on Rising Input Costs

Indian tyre companies' operating margins, which soared to 15-17 percent in FY2024 on the back of favourable raw material prices, are expected to take a hit in FY2025. This comes after a sharp increase in input costs since January 2024.

Global supply shortages triggered by adverse weather in Southeast Asia, a key natural rubber (NR) producing region, have caused international NR prices to jump 25-30 percent in the past four months. The RSS3 grade, a benchmark NR type, is currently trading around INR 185-186 per kg, with domestic prices mirroring this rise due to India's reliance on NR imports. This, coupled with increasing crude oil prices, is likely to squeeze tyre industry margins by 200-300 basis points in FY2025, according to ICRA.

Focus on Efficiency and Sustainability

With existing capacity utilisation at 75–85 percent, investments in new plants are expected to be moderate. The industry will likely shift towards debottlenecking existing facilities, process improvements, digitalisation, and research and development (R&D) for sustainable and smart tyres with lower rolling resistance and improved safety features.

Growth in the Retreading Segment

Rising environmental concerns and government initiatives are expected to drive the organised tyre retreading market at a CAGR of 7-9 percent during FY2023–FY2026. Focusing on sustainable practices, improved technology, better road infrastructure, and increasing radialization in the commercial vehicle segment will support this growth.

Credit Metrics to Remain Comfortable

Despite the expected margin contraction, the industry's credit metrics are forecast to remain healthy due to ongoing profitability and moderate capital expenditure plans. The industry is expected to continue investing 6–9 percent of its revenue in capex during FY2025.

Elmer Wiemer, Chief Financial Officer and designated Chief Executive Officer of Heuver Group, has passed away. The group shared the sad news in a statement announcing that he passed away on 4 May at the age of 48 after a brief illness.

Wiemer has had a lasting impact on the Heuver Group since he took office in 2020. As CFO, he played a pivotal role in bolstering the course, advancing the organisation's professionalism and attaining long-term success. His strategic vision and astute financial sense were always bolstered by a strong sense of accountability and a kind, humane leadership style.

“He was a true inspiration. Elmer’s legacy is tangible in the way we work together, in the culture he helped shape and in the ambitions he helped realise. We lose in him not only a leader, but also a warm personality, a dedicated colleague and a dear friend,” said Heuver Group management.

Goodyear has launched the award-winning Goodyear Eagle F1 Asymmetric 6 tyre in the United States and Canada. The premium summer tyre has emerged the winner in the 2025 AutoBild test for ultra-high-performance (UHP) tyres and is aimed at a wide range of sporty and luxury cars, crossovers and SUVS.

With its unique tread composition that optimises rubber-to-road contact, the Goodyear Eagle F1 Asymmetric 6 offers responsiveness and stability for dynamic driving. While the flexible tyre compound provides better grip in hot weather, the asymmetric tread pattern guarantees rapid responsiveness and traction in turns. To guarantee a peaceful, pleasant ride, the tyre pattern and lightweight design also reduce road noise. Goodyear's SoundComfort and SealTech innovations are two notable features found in certain Eagle F1 Asymmetric 6 fitments. For a more peaceful and elegant driving experience, SoundComfort reduces road noise, while SealTech successfully seals punctures up to five mm. Because of its high load rating and low rolling resistance, it is perfect for contemporary SUVs and electric cars, which require more from their tyres in order to maximise economy and range.

Nearly 90 percent of SKUs for the Goodyear Eagle F1 Asymmetric 6 are 18 inches or greater, with over 100 sizes available in the 17–23-inch range. Numerous well-known automobiles, such as the BMW M3/M4/X3/X4/X5/X6/X7, Audi A4/S4/A5/S5/A3/S3, Mercedes C-Class, Porsche Macan/Boxster/Cayman and Cayenne, and Tesla Model S, may be fitted with the Goodyear Eagle F1 Asymmetric 6. Customers may feel more secure about their purchase with the Goodyear Eagle F1 Asymmetric 6's 30,000-mile (50,000-kilometre) tread life limited guarantee. It is available at authorised Goodyear retailers across the United States and Canada.

Ryan Waldron, President, Goodyear Americas, said, "The Goodyear Eagle F1 Asymmetric 6 represents the next evolution of ultra-high-performance summer tyre, delivering precision, grip and comfort for drivers. As an award-winning tyre designed for a wide range of sporty and luxury vehicles, including the larger rim sizes on many of these vehicles, it provides a driving experience tailored to today's most premium enthusiasts. We're proud to introduce this globally recognised product to North America, bringing advanced technology and innovation that keeps drivers confident on the road."

Toyo Tires reported record first-quarter sales of 135.5 billion yen ($880 million), marking a 6.2 percent increase year over year and reaching its highest level since adopting its current accounting period in 2013. Despite the top-line growth, operating income fell 13.7 percent to 22.4 billion yen due to rising raw material costs and foreign exchange headwinds.

“Strong sales of large-diameter tyres in North America drove revenue growth but couldn’t fully offset higher production costs,” said the company in its earnings statement. The Japanese tyre maker saw a 7.7 percent sales increase in North America, which remains its largest market.

Profit Squeeze

Ordinary income plunged 42.7 percent to 18.3 billion yen, while profit attributable to owners dropped 41.4 percent to 13.5 billion yen, primarily due to foreign exchange losses from the yen’s appreciation. The Japanese currency strengthened to 154 yen per dollar during the quarter, compared to 146 yen in the year-ago period.

The company maintained its full-year forecast, projecting annual sales of 585 billion yen, up 3.5 percent from FY2024. Operating income is expected to reach 85 billion yen, down 9.6 percent , with operating margin declining to 14.5 percent from 16.6 percent last year. The annual dividend forecast is 125 yen per share, up from 120 yen in the previous fiscal year.

“Assuming tariff impact can be absorbed with appropriate measures, earnings forecasts for FY2025 remain unchanged,” the company stated, maintaining its dividend payout ratio target of 30 percent  or higher.

Production and Expansion

The tyre maker plans to increase production volume by 6 percent in FY2025 compared to the previous year, with significant growth in both Japanese and European operations. First-quarter global production volume was 59,100 tons, representing 98 percent of the previous year's level.

Capital investment for FY2025 is projected at 35.6 billion yen, up from 25.6 billion yen in FY2024, signalling continued expansion despite market headwinds. The company has invested 194 billion yen in capital expenditures over the past five years.

Market Conditions and Raw Materials

Raw material costs continue to pressure margins, with the company projecting a negative impact of 10.5 billion yen for FY2025. Natural rubber price increases are expected to cost 7.4 billion yen, while petroleum products will add 2.0 billion yen in costs, and other materials will contribute 1.1 billion yen to the cost pressure.

First-quarter sales volume showed strong recovery in the Japanese replacement tyre market, reaching 97 percent of the previous year’s level. In comparison, North America demonstrated robust growth at 105 percent year-over-year.

Product Innovation and Corporate Initiatives

The company recently launched premium tyres for high-roof kei cars in Japan with enhanced wet grip performance. These tyres feature eco-friendly materials that improve wet braking performance by 12 percent while reducing rolling resistance by 9 percent.

In March, the company introduced new SUV tyres designed specifically for quiet city driving that meet the “Low Car Exterior Sound Tyres" voluntary standard established by the Japan Automobile Tyre Manufacturers Association.

GRP Limited reported a 19 percent year-on-year increase in total income to INR 5.52 billion for fiscal year 2025, driven by an 11 percent increase in volumes and a three percent price increase. The company also announced a strategic capital expenditure plan of INR 2.5 billion to expand its sustainability-focused operations.

The Mumbai-headquartered polymer recycling company saw its EBITDA climb 33 percent to INR 694 million, with margins expanding by 128 basis points to 12.6 percent. Profit after tax rose 36 percent to INR 307 million for the fiscal year ended March 2025.

Expansion Plans and Financing

GRP’s board has approved a significant expansion plan that will be executed in two phases over three years. Phase one will involve capital expenditure of INR 1.5 billion to be deployed by December 2025.

GRP secured approval to raise INR 1.5 billion to finance the expansion through a qualified institutional placement (QIP) or other permissible methods. Additionally, the company has finalized documentation for external commercial borrowing of EUR 15 million from the French development finance institution Proparco.

“We've already invested approximately Rs 49 crore in our integrated facility project," said Harsh Gandhi, Managing Director of GRP Limited. "The crumb rubber unit commenced operations in Q4 FY25, and the first line of our continuous pyrolysis unit is scheduled to begin operations in Q1 FY26.”

Strategic Focus on Sustainability

The capital expenditure will focus on three key areas: deploying new technology to produce reclaimed rubber with lower CO₂ emissions, expanding capabilities in crumb rubber and other categories identified under India’s Extended Producer Responsibility (EPR) regulations, and growing the plastic recycling business.

The company noted that its energy investments already yield tangible benefits, with savings of INR 36.7 million from renewable power and INR 36.4 million from biofuel projects in FY25. These initiatives contribute significantly to reducing greenhouse gas emissions.

Quarterly Performance

For the fourth quarter of FY25, GRP reported total income of INR 1.606 billion, up 16 percent year-on-year. Q4 EBITDA jumped 45 percent to INR 331 million, with margins expanding by 404 basis points to 20.6 percent. Profit after tax for the quarter rose 67 percent to INR 194 million.

Business Segment Performance

The company’s reclaim rubber segment, which contributes 89 percent of total revenue, saw a 16 percent increase in revenue to INR 4.78 million for FY25. The non-reclaim rubber segment, comprising engineering plastics, polymer composite, and custom die forms, grew 15 percent to Rs 572 million.

Export revenue, which makes up 56 percent of total revenue, increased by 11 percent to INR 2.98 billion. Domestic revenue grew by 23 percent to INR 2.37 billion.

Extended Producer Responsibility Revenue

GRP reported INR 220 million in EPR credit sales and an accrual of INR 214 million in EPR revenue, citing improved stability in the EPR regime, consistent demand for credits, and the emergence of a stable market price.

“The enforcement of EPR regulations for plastics starting 1 April 2025 is expected to drive further demand for our products," added Gandhi.

Operational Efficiency

The company improved its working capital efficiency, reducing the working capital cycle from 94 days in FY24 to 76 days in FY25. Employee costs declined from 11.8 percent to 11.3 percent of revenue, reflecting the impact of automation initiatives.