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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India’s tyre retail industry is undergoing a dramatic makeover, moving far beyond the cluttered workshops and transactional buying of the past. Fuelled by rising demand for premium vehicles, digital-first customers and stronger export momentum, tyre makers are transforming retail spaces into sleek, immersive experience centres. What was once a routine utility purchase is rapidly evolving into a premium, advisory-led mobility experience designed for a new generation of motorists.

India’s tyre retail scene is shifting gears, leaving behind the era of crowded workshops and impersonal counters. In their place, manufacturers are rolling out sleek, thoughtfully designed, tech-powered spaces that echo the luxury of high-end car showrooms. What started as a few bold pilots in big cities has quickly become the go-to playbook for tyre brands eager to win over a new generation of savvy, comfort-loving, digital-first customers.

From urban to rural areas, this transformation reveals a profound change in how Indians approach mobility. Today’s motorists – especially those behind the wheel of SUVs, luxury sedans and electric cars – want more than just a tyre swap. They crave expert advice, a polished atmosphere and a shopping experience that reflects the elegance of their vehicles. Once a utilitarian afterthought, tyre retail is now emerging as a coveted part of the automotive journey.

Strong OEMs and replacement demand in both domestic and export markets underpin the transition.

In FY 24-25, tyre exports from India surged by nine percent year-on-year to INR 251 billion, according to data released by the Ministry of Commerce. With an estimated annual turnover of INR 1 trillion and exports exceeding INR 250 billion, the Indian tyre industry stands out as one of the few manufacturing sectors in the country with a high export-to-turnover ratio.

Though tyre exports have hit a speed bump due to higher US tariffs on select categories of Indian tyres compared to those of competing nations, the long-term prospects for the Indian tyre industry remain strong. According to a joint report by ATMA and PwC India titled ‘Viksit Bharat 2047: Vision and Roadmap for the Indian Tyre Industry’, India’s tyre production volumes are projected to grow nearly fourfold by 2047, while industry revenues are expected to expand almost 12 times to about INR 13 trillion.

Against this backdrop, tyre makers are modernising aggressively to retain customers and build a more profound emotional affinity. The broad shift is visible in how retailers are reinventing their spaces. Lounges with crafted lighting, upholstered seating, minimalist décor and large digital walls are replacing traditional steel racks and dusty counters. Informational murals and heritage display trace decades of tyre innovation, strengthening brand storytelling. Stores increasingly feature curated experience zones where customers can explore tyre technologies, EV-compatible profiles, eco-friendly materials and performance characteristics through visual displays and interactive tools.

A clear sign of this trend is the rise of personalised, advisory-led engagement, replacing the old dependence on technicians. Retailers now profile driving habits, terrain usage, daily distance and vehicle type to recommend tyres customised to each consumer’s pattern. This service-led model is shifting the customer’s mindset from price-first decision-making to long-term value evaluation.

The new premium outlets are designed to deliver a lifestyle-driven, hospitality-grade experience rather than a traditional tyre shop visit. Customers receive personalised mobility recommendations tailored to their vehicle, driving style and needs, supported by smart service innovations like intelligent product selection, quick-fit services and digital scheduling. The space also acts as a community hub for driving enthusiasts, creating a connected ecosystem around the brand. With lounge-style comfort, immersive storytelling and specialised tyre and service packages for luxury and performance vehicles, the outlet blends convenience, premium care and brand-centric offerings into an elevated customer experience.

“Customer experience at the point of sale is another branding exercise poised to change buyer characteristics. Multi-brand outlets often commoditise the tyre-buying experience. That’s why companies are launching exclusive brand outlets with curated customer experiences. Over the next decade, new delivery models will emerge,” said Kavan Mukhtyar, Partner and Leader – Automotive, PwC India.

Apollo Tyres articulates this change as a move towards lifestyle-led retailing. Its new super-premium outlets have been built not as showrooms but as emotionally resonant spaces.

Udyan Ghai, Group Head of Marketing at Apollo Tyres, explained that the company’s new retail architecture is anchored in long-term strategic priorities: “Our move to a lifestyle-led, immersive tyre retail format is driven by our own desire for premiumisation and category leadership. We are looking at elevating tyre retail in India by setting new benchmarks and shifting from commodity selling to a premium, lifestyle-driven experience.”

He said the brand aims to ‘emotionally engage with customers, offer tailored solutions, build a community of driving enthusiasts and tap into premium segments – all while delivering a differentiated, modern retail experience’.

Ghai believes retail ambience plays a decisive role in influencing perception. “A relaxed and well-designed lounge signals comfort, trust and premium value,” he said, adding that such environments elevate tyres from a mundane requirement to a core element of vehicle care and identity.

Digital transparency, he believes, is the second pillar of modern tyre retail. “Digital systems ensure transparency and help demystify tyre selection – tread patterns, speed ratings, durability and fitment. Consumers feel less dependent on a technician’s word and more in control, which boosts their confidence and perceived fairness,” Ghai said.

Customers today are inundated with choices, and digital systems, he said, turn tyre buying into an ‘informed, personalised decision’, comparable to selecting a smartphone, a pair of performance shoes or even a detailed insurance plan. According to Ghai, this new retail model is ‘a strategic investment in the future of mobility retail’, designed to be scalable and to support community-building events, workshops and enthusiast interactions. As India moves towards EVs and connected cars, he said these premium outlets will provide EV-focused tyre expertise, interactive digital tools and personalised recommendations that appeal to younger, digitally savvy motorists.

CEAT shares a similar philosophy. Its national retail revamp focuses heavily on digital immersion, consistent messaging and design-led layouts. Lakshminarayanan B, the company’s Chief Marketing Officer, said the modernised CEAT Shoppes are fundamentally reshaping the category.

“The modern layouts and digital integration in CEAT Shoppes are revolutionising the tyre-buying experience, making it more experiential and customer-centric,” he said, adding that these updated outlets elevate the experience, build trust through uniform communication and drive decisions by reducing ambiguity around features and value.

Lakshminarayanan highlighted CEAT’s attempt to harmonise customer experience across demographics: “The approach in urban markets through premium stores, product offerings and services is to create access and aspiration for premium customers. The same is replicated in upcountry markets also.”

The CEAT Executive said the company is building for a future where personalisation will be the defining characteristic of tyre retail. “CEAT is focused to drive the future of tyre retail through end-to-end personalisation,” he said.

As experiential retail takes hold, service portfolios inside tyre stores are expanding faster than ever. Advanced wheel balancing, laser-driven alignment systems, nitrogen inflation, premium alloy wheel installations, EV-oriented tyre consultations, digital appointment scheduling and real-time tyre-health diagnostics are now standard. Many outlets also provide car detailing, interior cleaning, ceramic coating, PPF application, brake checks, battery inspections and multi-point vehicle health reports, making them full-fledged mobility centres.

Global players have pushed the envelope even further. Michelin’s 25,000-square-foot Experience Store in Nashik features a heritage wall and innovation displays showcasing electric mobility, materials science and environmental responsibility. It houses precision wheel-alignment bays, detailing studios, and accessory galleries. “We are proud to unveil Michelin’s first Experience Centre in India. The sole purpose of this store is to go beyond traditional tyre retail and provide customers with an immersive experience of the brand,” said Shantanu Deshpande, Managing Director of Michelin India.

Continental Tyres is also strengthening India’s premium retail ecosystem through its CPD outlets, which include ambient lounges, diagnostic equipment, premium alloy wheels and digitally enabled guidance. “With our new CPD store in Indore, we bring Continental’s promise of safety, innovation and comfort closer to Madhya Pradesh’s clients,” said Samir Gupta, Managing Director of Continental Tyres India. He added that the brand’s ‘In the Market, For the Market’ approach is central to its retail expansion strategy.

Even in rural markets, tyre retail is becoming more formalised, structured and service-oriented. JK Tyre’s ‘Steel Wheels’ format is targeted at towns with populations under 100,000 and offers standardised layouts, value-added services, best-in-market pricing and instant claim facilities. “Our Rural expansion programme will help us reach the interiors of the real Bharat that is economically vibrant but often underserved. We are not just building retail points; we are also enabling entrepreneurship and access,” said Managing Director Anshuman Singhania.

Together, these developments mark a decisive shift in how tyre brands engage customers. Tyre stores are increasingly functioning as lifestyle environments, designed for comfort, informed decision-making, personalisation, transparency and community. The industry is moving away from a product-first mindset to a customer-experience-led philosophy.

As premium cars, SUVs and EVs become mainstream, and as younger motorists prioritise digital empowerment and ambience, tyre retailers are aligning with these new expectations. India’s tyre makers are building a retail landscape where experiential engagement, technology integration, service breadth and emotional connection define long-term brand success.

For an industry long anchored in grease, metal and functionality, the transformation is profound. Tyre retail in India is no longer just about fitment; it is becoming a premium mobility experience, curated for a generation that demands clarity, comfort and an elevated relationship with every aspect of vehicle ownership.

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Kumho Tire will establish its first European manufacturing plant in Poland’s Opole region as the South Korean company seeks to expand its position in one of the world’s largest tyre markets.

The group said the factory is scheduled to begin initial operations in August 2028, subject to investment approval and licensing. Kumho plans to produce 6m units annually in the first phase and expand capacity in line with demand. Total planned investment is USD 587 million.

Kumho has spent recent years evaluating multiple European locations, including Poland, based on logistics, labour availability, infrastructure, market access and investment incentives. The company said Opole was selected as the optimal site owing to supply-chain stability within the EU and the region’s supportive operating conditions.

Europe accounts for about a quarter of global tyre consumption and is home to several major automotive manufacturers. The region represented roughly 26.6 per cent of Kumho’s sales last year. The company has previously relied on exports to serve European customers, which it said limited its competitiveness in the market.

The new plant is intended to strengthen Kumho’s ability to supply high-value-added products, including high-performance and larger-diameter tyres, to European vehicle makers.

Kumho currently operates eight production sites across South Korea, China, the US and Vietnam, with combined annual output of 65 millionunits. The Polish plant will complete what the company describes as a production network spanning Asia, Europe and North America.

Jung Il-taek, Kumho Tire’s Chief Executive, said: “The European market occupies a very important strategic position in the global tire industry,” adding that “Kumho Tire will go beyond simple exports and dramatically enhance premium brand value by strengthening quality and service competitiveness through local European production and supply.”

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Tyre Stewardship Australia has appointed David Fraser as its new chair, succeeding David Spear after nine years in the role during a period of regulatory and industry change in the country’s tyre-recycling sector.

Spear’s departure closes what the organisation described as a challenging yet incredibly important chapter for its efforts to advance circular outcomes for Australia’s end-of-life tyres. TSA, an industry body backed by government and sector participants, oversees the national stewardship scheme and promotes recycling and re-use pathways for waste tyres, an area facing increasing scrutiny under Australia’s environmental and product-stewardship policies.

In a statement, TSA said it “thank[s] him for his unwavering support and dedication to driving circular outcomes for Australia’s end-of-life tyres”.

Fraser, a TSA director since 2023, brings experience in governance and compliance. He joins at a time when Australian states are tightening environmental standards and seeking to reduce landfill through higher recycling targets. TSA said Fraser has “deep understanding of our strategy, our challenges and the opportunities ahead”.

The organisation added: “We look forward to his leadership as TSA enters its next chapter.”

TSA also expressed appreciation to Spear “for your contribution and support of our mission”, and welcomed Fraser, saying it is “excited and ready for what lies ahead”.

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Infiniteria, the tyre recycling joint venture backed by Scandinavian Enviro Systems, Antin Infrastructure Partners and Michelin, has named Kajsa Ryttberg-Wallgren as its new chief executive as the company moves into a phase of industrial expansion.

Ryttberg-Wallgren, who has taken up the role on 1 December, succeeds Stefano Madeddu. She most recently served as chief growth officer at Stegra, a Swedish green steel venture. Her earlier career includes senior positions at PIAB, Yara International, Sandvik and Sapa, giving her broad experience in scaling industrial operations internationally.

The appointment signals a shift in leadership priorities at Infiniteria, with an emphasis on what the company describes as “industrial logic and value creation”. Announcing the move, Anand Jagannathan, senior partner at Antin Infrastructure Partners’ NextGen strategy, said: “We are delighted to welcome Kajsa Ryttberg-Wallgren as CEO of Infiniteria. She offers a strong combination of Swedish industrial experience, a track-record in international expansion and strong sustainability credentials, all of which are highly relevant for Infiniteria and the journey ahead of us.”

Enviro is developing a full-scale tyre recycling plant near Uddevalla on Sweden’s west coast, expected to be Infiniteria’s inaugural site. The venture aims to build additional facilities across Europe to process end-of-life tyres using Enviro’s patented pyrolysis technology, which breaks down materials for reuse in industrial applications. The partners say the process will support circular production models and reduce carbon emissions in sectors heavily reliant on fossil-derived inputs.

The expansion plans place Infiniteria among several European initiatives seeking to commercialise advanced recycling technologies as regulators push for higher material recovery rates and lower industrial emissions.

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