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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CAMSO Construction has announced the appointment of Andreas Lüllau as Area Sales Manager for the DACH region. His career in industrial and construction tyres began in 2007 at Industriereifen Kontor Lüdtke, where he developed extensive industry experience. The company stated that his strong background adds valuable expertise and a solid understanding of the DACH market. CAMSO Construction looks forward to his contributions in strengthening the company’s regional presence and partnerships.

The company statement read: “His career in industrial and construction tires began in 2007 at Industriereifen Kontor Lüdtke, and since then, he has built extensive experience across the industry. This strong background adds valuable depth to the expertise he brings to the team, along with a solid understanding of the DACH region. We look forward to the contribution he will make in strengthening our presence and partnerships in the market. Welcome to CAMSO Construction, Andreas!”

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Radar Tires has named Anthony Sbona as Territory Sales Manager for its Radar brand in North America. Entering the tyre industry in 2018, Sbona quickly established a strong foundation in sales and customer relationship management, later expanding his expertise across distribution channels and gaining a deep market understanding. His career progression reflects consistent growth and adaptability in a competitive sector.

Known for building relationships and driving results, Sbona now brings a fresh perspective and solid industry experience to the team. His new role focuses on expanding the Radar brand’s reach, strengthening distributor partnerships and accelerating growth across his assigned territory, positioning the company for sustained regional success.

Rob Montasser, Vice President for Radar Tires North America, said, “We’re excited to welcome Anthony to the Radar Tires team. Anthony’s experience gives him a strong understanding of the market and his region, and we’re confident he will play a key role in continuing to grow our presence across North America.”

Sbona said, “I’m excited to be part of the rapidly expanding Radar Tires team. I look forward to building strong partnerships, growing the brand, and contributing to the continued success of Radar Tires.”

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Monolith has elevated Russ Webb to the role of Chief Executive Officer, signalling a major shift for the Nebraska-based advanced manufacturer. The company, which produces carbon black and hydrogen using its own hydrocarbon pyrolysis technology, is headquartered in Lincoln. This leadership change reflects Monolith’s transition from a focus on technology development to pursuing large-scale manufacturing and geographic expansion, with Webb expected to drive continued progress on the company’s growth plans within the state.

A veteran of the refining, petrochemicals, speciality chemicals, polymers and carbon black sectors, Webb brings more than 35 years of industry experience to the top job. He joined Monolith as Chief Operating Officer, where he managed manufacturing, environmental health and safety, capital projects and supply chain strategy while working alongside commercial and technical teams. His background includes running operations and engineering at multiple global facilities, overseeing greenfield and expansion efforts totalling over USD 750 million and leading major investments in emissions controls, technology upgrades and energy infrastructure across two decades in the carbon black field.

Rob Hanson, Monolith’s Co-Founder, who shepherded the company from an initial concept to a functioning commercial producer of American-made carbon black, will stay on as a senior advisor to ensure a seamless handover. The company remains firmly focused on its Nebraska expansion, with ongoing momentum aimed at securing long-term investment, creating jobs and bolstering domestic output of essential industrial materials.

Hanson said, “Monolith was founded to rethink how carbon black and hydrogen are produced, and I’m incredibly proud of what this team has built. As we enter our next phase, which is focused on execution, reliability and growth, Russ is the right leader for the moment. His depth of operational experience and proven ability to lead complex manufacturing expansions position Monolith well for what comes next.”

Webb said, “I’m honoured to step into the CEO role as Monolith advances towards large-scale manufacturing and expansion in Nebraska. We have a strong foundation, meaningful momentum and a clear mission to produce carbon black and hydrogen at scale. My focus is on safe, reliable execution, strengthening our operations and supporting the company’s long-term growth.”

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BKT, which operates under the BKT Tyres brand, has launched a social media-led campaign aimed at strengthening consumer recall as it expands into India’s on-highway tyre market.

The company said the campaign, titled “Sound of BKT”, forms part of its “Elevate Your Drive” brand platform and coincides with India’s men’s T20 cricket season.

The initiative centres on a brand anthem featuring 25 cricketers from eight T20 franchises, including Kolkata Knight Riders, Royal Challengers Bengaluru and Mumbai Indians. The campaign is designed to encourage participation from fans and digital creators through user-generated content and social media engagement.

BKT said the campaign also uses sonic branding to improve brand recognition during the cricket season, which remains one of India’s most competitive advertising periods. The company has introduced a simplified “BKT Hook Step”, intended as a participative gesture that can be replicated by supporters online.

Mahesh Koppad, Chief Marketing Officer at BKT Tyres, said the company was seeking to move beyond conventional sports sponsorship as it broadened its presence in the consumer mobility market.

“Our multi-season association with Indian T20 League has successfully established robust brand visibility. However, as BKT transitions into a comprehensive mobility provider in the consumer on-highway tyre market, our marketing must evolve from passive sponsorship to active emotional resonance,” Koppad said.

He added that cricket’s cultural significance in India provided an opportunity for the company to build stronger engagement with younger consumers as it expanded its product portfolio.

The campaign will be released in phases across digital platforms, including influencer collaborations, team-specific content and participative contests during the cricket season.

Founded in 1987, BKT manufactures off-highway tyres for sectors including agriculture, construction, mining and material handling. The company recently announced its entry into India’s two-wheeler, passenger car and commercial vehicle tyre segments.

Link to the campaign:

• Instagram: https://www.instagram.com/p/DYPZLGmoDfh/
• YouTube: https://www.youtube.com/watch?v=JyXOfsJ2zJo

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