India’s tyre industry is bracing for a tough fiscal year, weighed down by sluggish demand, volatile raw material prices and muted export growth. Revenue is forecast to expand just 7-8 percent – supported by modest price hikes and a marginal rise in volumes – marking a second straight year of single-digit growth. However, operating margins are set to contract sharply as natural rubber prices remain elevated despite recent moderation. In a wide-ranging discussion, Anuj Sethi, Senior Director at CRISIL Ratings, unpacks the factors shaping the sector, from price pressures and replacement demand to global headwinds and evolving trade dynamics.

How would you characterise the current fiscal year for the Indian tyre industry, considering its challenges and opportunities?

With volume expected to grow just by about 3-4 percent due to sluggish demand, overall revenue growth will remain in single digit for the second straight year, this fiscal. On the other hand, high raw material prices, especially of natural rubber, rose sharply over the past 12 months and have only recently begun to moderate. To a moderate extent, tyre manufacturers are increasing tyre prices in the replacement market to offset the impact of higher input prices, albeit operating profitability will still be impacted this fiscal.

The report mentions 7-8 percent revenue growth this fiscal year, supported by a 3-4 percent increase in realisations and volume. What specific factors could push growth beyond this forecast, and what risks might undercut it?

While realisation growth due to price hikes being undertaken by tyre manufacturers is a certain given sharp increase in natural rubber prices, higher than projected volume growth could take the growth higher than expected. With about 2/3rd of the domestic demand

coming from replacement segment, and it being the primary volume driver, any significant decline in that demand can impact the growth forecast other way.

Given that replacement demand is the primary volume driver, how do you assess the longevity of this demand surge in the context of evolving consumer preferences and vehicle usage patterns?

The replacement demand is expected to sustain over the medium term driven by the strong automotive sales achieved in previous fiscals.

With operating profitability projected to drop 300 basis points, what contingency measures are tyre makers considering beyond gradual price increases to mitigate this impact?

The price of natural rubber, which constitutes about half of the raw materials, continued to surge sharply in the first half of fiscal 2025. However, ability to pass on this increase is limited due to modest volume growth. Small price hikes and continued focus at improving operating efficiencies on an ongoing basis is another way to offset the impact to some extent.

Natural rubber prices have been highly volatile, reaching record highs and then falling to around INR 170 per kg. What is your outlook for natural rubber prices in the near to medium term, and what factors will likely influence their movement?

The sharp rise in natural rubber prices is due to a global shortage caused by inclement weather in major producing countries such as Thailand and Vietnam, which account for about half of the global production. Going forward, increase in supply with improving hectarage and slowdown in global economies is likely to drive correction in international rubber prices. In the last couple of months, some moderation in natural rubber prices has happened.

China has a surplus in crude oil-derived raw materials, including carbon black and other chemicals. Do you anticipate this surplus impacting global prices for these commodities, and how might Indian tyre makers benefit or face challenges as a result?

Share of natural rubber in tyre manufacturing is 47 percent, while carbon black accounts for ~20-22 percent. Should carbon black prices remain under control, it will benefit domestic tyre manufacturers.

Export growth is expected to remain muted at 2-3 percent. How does the current geopolitical climate, including sanctions or trade restrictions, further complicate Indian tyre makers’ access to markets in North America and Europe?

Export growth is expected to remain sluggish due to challenging business conditions in US and Europe. However, certain segments like off-the-road tyres are beginning to see better prospects as stocks with dealers are moderating. This could help players with presence in the off-the road- tyre segment.

Exports to key markets such as North America and Europe are under pressure due to economic challenges and unviable operating costs, leading to plant shutdowns in regions like US, Europe and Israel. Is the Indian tyre industry at risk of facing similar challenges, or does it have structural advantages that mitigate these risks?

Indian players are better placed compared to some of the western peers due to comparatively lower cost of operations, though operating profitability has come under pressure this fiscal because of higher imported rubber prices. Also, Indian players have flexibility to supply in small batch sizes unlike Chinese peers, and hence this also works to their advantage, more prominently in higher margin segments such as off-the road tyres.

Have tyre makers explored new international markets or alternative trade routes to counter supply chain disruptions and higher freight costs?

Not really; to circumvent the difficult environment around the Suez Canal, vessels are going around the Cape of Good Hope, adding 2-3 weeks and additional freight cost on exports. Some of the costs are being shared with the customers.

The report references Extended Producer Responsibility (EPR) regulations. How significant is the financial and operational burden of compliance for tyre makers, and what progress has been made in addressing this?

Adoption of EPR regulations is not expected to have a very sizeable impact on profitability, though it will lead to investments in strengthening processes and in technology.

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Balkrishna Industries (BKT) has appointed Saroj Kumar Khuntia as chief financial officer with effect from June 18, following the retirement of Madhusudan Bajaj, who stepped down after attaining the age of superannuation.

The board approved Khuntia's appointment at its meeting on June 17, based on the recommendations of the nomination and remuneration committee and the audit committee.

Bajaj ceased to serve as chief financial officer and key managerial personnel at the close of business on June 17 in accordance with the company's retirement policy.

The company said his departure was not a resignation. Following his retirement, Bajaj will continue to assist the company as special adviser to the chairman and managing director.

The board recorded its appreciation for Bajaj's contribution and leadership during his tenure.

Khuntia assumes the role of chief financial officer and key managerial personnel from June 18. He will also serve as compliance officer.

A fellow chartered accountant, Khuntia has more than 24 years of experience in corporate finance, strategy, capital markets, treasury, taxation, governance and finance transformation.

He has previously worked with CG Power, the Mahindra & Mahindra Group, IBM and Hindustan Lever.

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As cost pressures tighten across the global tyre industry, manufacturers are increasingly turning inward to extract efficiencies from processes they can control. While raw material volatility remains unavoidable, machinery performance has emerged as a decisive lever in balancing cost and quality. Companies like Comerio Ercole position themselves as critical enablers in this shift, promising precision, consistency and waste reduction. However, the extent to which advanced machinery alone can offset broader market uncertainties warrants closer scrutiny.

It is no news that the global tyre industry is looking at every angle of its procurement to supply ecosystem for being more conservative from a price point. Nonetheless, it is a prudent reality of today’s volatile global market that certain aspects within tyre manufacturing process, such as raw material prices, cannot be controlled or influenced.

Hence, manufacturers look more inwards, and that call is being addressed by the other players of the value chain such as machine manufacturers. Italian tyre machinery maker Comerio Ercole makes machines that minimise variability in production, reducing scrap and optimising material usage.

Speaking to Tyre Trends exclusively, Managing Director Riccardo Comerio said, “Our machines derive their credibility in the market because of their high precision and long-term reliability. Our machines minimise variability in production, reducing scrap and optimising material usage. Their durability also ensures lower maintenance costs and long-term investment value.”

Comerio Ercole was founded in 1885 and headquartered in Busto Arsizio, specialising in high-end machinery for the rubber, plastics and nonwovens industries with a particularly strong global reputation in calendering technology, which is one of the most critical processes in tyre manufacturing.

It operates upstream as a key technology partner, supplying advanced calender lines, mixing systems, coating and lamination equipment and turnkey plant solutions to leading tyre manufacturers worldwide, thereby acting as an enabler of tyre production.

The company combines mechanical engineering with process expertise, digital Industry 4.0 capabilities and research and development-driven innovation, including patented systems and award-winning solutions like the ZEUS calender line, while also expanding into sustainability through recycling technologies such as devulcanisation systems.

Its last notable move being a 2022 strategic stake in Sasmac International (Saspol Technology) to expand capabilities in presses and retreading systems, recent efforts have focused on digital platforms like Hercules40, continuous product innovation and global market engagement.

“The company continuously improves mechanical precision and process stability, ensuring excellent uniformity. The combination of high-quality machine construction, advanced control systems and super precise roll geometry allows for very tight tolerances and consistent output over time,” added Comerio.  

NEW REQUIREMENTS

According to Comerio, the main challenges that tyre makers face today include managing complexity, ensuring precision and consistency, reducing waste and maintaining efficiency. This makes high-performance, precise and durable machinery more important than ever.

He noted that the future of tyre making technology will focus on precision, durability and efficiency, combined with automation and sustainability. “Companies like Comerio Ercole, together with complementary partners such as Saspol, are well positioned to support the evolution of the tyre industry with very reliable, high-quality solutions,” he noted.

He added that as a global leader in calenders, open mills and internal mixers for the tyre and rubber industry, their machines are designed for high performance, extreme precision and long operational life.

To meet evolving compound requirements, Comerio Ercole focuses on robust engineering, precise control of process parameters and the ability to handle increasingly complex and high-performance rubber formulations, especially for major tyre manufacturers in markets like India.

The calenders and mills are built to process high-performance and speciality compounds with stability and accuracy. Their robust design and precision allow customers to consistently achieve the required performance standards.

Moreover, automation enhances the inherent strengths of the machines such as precision and reliability by ensuring consistent operation, reducing human error and improving overall production efficiency.

Commenting on the evolving systems to process recycled and sustainable rubber materials, Comerio said, “Processing recycled materials requires even greater control and stability. Our machines are well suited to handle these challenges while maintaining product quality. We also offer compact plants for rubber devulcanisation and for the re-work of non-vulcanised rubber scraps.”

The demand from the retreading industry is also shaping the company’s market strategy. “The growing importance of retreading highlights the need for durable and reliable equipment. Through companies like Saspol, which offers long-lasting and high-quality compression presses, it is possible to address this segment effectively and complement Comerio Ercole’s core technologies,” noted the executive.

“Saspol specialises in high-quality rubber compression presses, known for their durability and reliability over time. It provides solutions for solid tyres, tyre retreading and conveyor belt presses. There is no competition between the two companies as Saspol complements Comerio Ercole’s offering, allowing us to cover additional applications in the rubber industry and serve a wider range of customers also in India,” he added.

Ultimately, while high-precision machinery offers tangible gains in efficiency and cost control, it is not a standalone solution to the tyre industry’s challenges. The real impact lies in how effectively manufacturers integrate such technologies with broader operational strategies, especially as sustainability, recycling and evolving material demands reshape the production landscape.

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India’s growing importance in the global tyre and rubber industry received a strong endorsement with HF Group announcing a EUR 20 million investment in a new state-of-the-art manufacturing facility in Bengaluru.

The announcement was made during the inauguration of HF India’s new Assembly Hall Unit II, a milestone that reflects the company’s long-term commitment to India and its confidence in the country’s manufacturing future.

The proposed greenfield facility will be developed on a 10-acre site near Bengaluru Airport and is scheduled for completion by 2028. Spread across nearly 20,000 sq. metres, the new factory will be almost four times larger than the current assembly operations and will incorporate digital manufacturing, automation, smart production systems, and advanced engineering capabilities.

The upcoming facility will focus on productivity, precision engineering, sustainability, and smart manufacturing while supporting both the Indian market and HF’s global operations. The investment underlines the company’s confidence in India as a major manufacturing hub for the global tyre and rubber industry.

Ian Wilson, Managing Director & Co-CEO, HF Group, said, “This is not the end of our investment in India. It is perhaps the end of the beginning. India is entering a take-off decade and the economy runs on tyres. We see tremendous opportunities for growth and are committed to investing in the future of the Indian market.”

With more than 175 years of global experience, HF Group has steadily strengthened its presence in India. The journey began in 1995 with the establishment of Indus to serve the growing rubber processing industry. The partnership with HF Mixing Group in 2011 brought global mixing technology expertise to India, while the complete acquisition of the Indian subsidiary in 2024 marked another important milestone in the company’s India strategy.

Today, HF India manufactures and supports a broad portfolio of mixing and rubber processing equipment, including intermeshing and tangential mixers, banbury technology, mills, curing presses, and aftermarket services. The company also offers process support, training, upgrades, inspections, and spare parts under its customer-centric philosophy of ‘Holding the Customer’s Hand.’

Emphasising the importance of customer partnerships, Wilson said, “We are not here simply to sell machinery. We want to hold our customers’ hands throughout the entire lifecycle of their equipment and support them through process optimisation, performance improvements and future growth.”

As HF embarks on its next chapter in India, the new facility represents not only an investment in manufacturing capacity but also a long-term commitment to localisation, technology and customer partnerships.

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TBC Corporation (TBC), one of North America’s largest marketers of automotive replacement tyres through wholesale and franchise operations, has named Ron Harper as its new Chief Supply Chain Officer. He will report directly to President and CEO Don Byrd and assume responsibility for the company’s entire supply chain function.

Harper brings over 26 years of experience steering global supply chains for multi-billion-dollar enterprises. His most recent role was Executive Vice President of Supply Chain at PrimeSource Building Products, overseeing planning, inventory, repack operations, service metrics and analytics. He has also held senior logistics and strategy positions at Sonepar USA, Nordstrom, Samsung SEA, and JCPenney.

The new chief holds a master’s degree in supply chain management from the University of Denver and a bachelor’s in industrial management from Michigan Technological University. His appointment underscores TBC’s focus on strengthening operational efficiency and logistics performance.

Byrd said, “Ron’s depth of experience in building transformative supply chain solutions aligns with our deep commitment to providing customers with the high-level efficiency, product availability and agility they expect from TBC. As market needs change and demands fluctuate, TBC is continuing to respond by having a supply chain strategy that minimises disruptions and maximises efficiency to ensure the highest levels of customer support and satisfaction.”

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