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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In a strategic expansion of its global footprint, Bekaert has agreed to acquire Bridgestone’s tyre reinforcement operations in China and Thailand, encompassing the tyre cord production facilities in China (Bridgestone (Shenyang) Steel Cord Co., Ltd) and Thailand (Bridgestone Metalpha (Thailand) Co. Ltd.). This move significantly strengthens the market leadership of Bekaert’s Rubber Reinforcement division, its largest business unit, which has led the global tyre cord sector for decades. The acquisition, set for completion in the first half of 2026 pending regulatory approvals, is a continuation of the division's proven strategy in integrating the captive production of major global accounts.

This transaction reinforces the enduring strategic partnership between Bekaert and Bridgestone, a leading tyre manufacturer. As part of Bridgestone's mid-to-long term plan to boost competitiveness through collaboration, the deal includes a long-term supply agreement ensuring continued provision of high-quality tyre reinforcement. For Bekaert, the integration of these two established production facilities enhances its manufacturing presence and solidifies its position in the tyre cord market.

Financially, the acquisition is projected to contribute approximately EUR 80 million in annual consolidated sales for Bekaert. The purchase involves a cash consideration of EUR 60 million, which will be drawn from the company's existing cash reserves. By securing these key assets and a lasting supply partnership, Bekaert not only expands its operational scale but also deepens its trusted supplier relationship with a pivotal global account.

Yves Kerstens, CEO, Bekaert, said, “Bekaert and Bridgestone share a longstanding strategic partnership built on mutual trust and collaboration. When the transaction closes, we are delighted to welcome the plant teams to Bekaert and remain committed to joint growth and innovation with Bridgestone. The acquisition is also a clear signal of strengthening our global leadership position in the tyre reinforcement industry.”

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The Yokohama Rubber Co., Ltd. has successfully secured a Certificate of Rubber Fender Test Environment from Japan’s Specialists Center of Port and Airport Engineering (SCOPE), awarded on 23 January 2026. This certification follows a thorough assessment under SCOPE’s Rubber Fender Testing Environment Certification Program, which validates that the company’s testing facilities for marine rubber fenders operate with integrity and reliability. Specifically, the certification confirms that Yokohama Rubber employs a robust system designed to prevent data fraud, ensuring the trustworthiness of all test results for fenders it manufactures and sells.

These fenders serve as critical safety components, acting as cushioning buffers to protect vessel hulls from impact during harbour mooring and ship-to-ship transfers at sea. To promote safer and more secure maritime operations, SCOPE launched its certification initiative in April 2023, focusing on verifying the reliability of fender testing environments. The programme is aligned with technical guidelines from the World Association for Waterborne Transport Infrastructure (PIANC) and evaluates compliance across multiple SCOPE-defined criteria. These include adherence to static compression testing standards, the elimination of opportunities for data falsification, the integrity of statistical values in test data and the establishment of corporate systems that prevent tampering.

Yokohama Rubber’s expertise in this field dates to 1958, when it pioneered the world’s first pneumatic fender for offshore vessel berthing. Recently, the company has broadened its portfolio beyond high-performance pneumatic fenders to include solid fenders, which represent a principal segment of the fender market. This strategic expansion establishes Yokohama Rubber as a comprehensive fender manufacturer and reinforces its revenue foundation.

The achievement aligns with the company’s ongoing medium-term management plan, Yokohama Transformation 2026 (YX2026), which spans fiscal years 2024 to 2026. A key element of this strategy involves driving growth in the MB Segment by focusing resources on core domains such as hose and couplings along with industrial products. Within this framework, Yokohama Rubber aims to strengthen its product lineup and sustain strong market shares for marine products, including fenders, to secure steady profit growth in the industrial products business.

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In a strategic move to strengthen its connection with vital regional audiences, Bridgestone India has partnered with multifaceted Punjabi star Parmish Verma. This collaboration is designed to resonate deeply in North India, a crucial and rapidly expanding market fuelled by increasing vehicle ownership and a youthful demographic. Verma, a prominent cultural figure and known automobile enthusiast, aligns naturally with the brand’s emphasis on safety, reliability and performance. His authentic passion for vehicles and responsible driving complements Bridgestone’s identity as a leading mobility solutions provider.

Central to this alliance is the co-creation of engaging, music-led narratives and digital content for Bridgestone’s campaigns, leveraging Verma’s artistic talents and significant social influence. This approach recognises the powerful role of popular culture in shaping brand preferences within the region. The partnership also advances the company’s broader regional engagement goals, aiming to build deeper trust with consumers nationwide. Furthermore, it embodies the ‘Emotion’ principle of Bridgestone’s corporate commitment, which seeks to inspire excitement and deliver joy through mobility. By uniting with a figure of Verma’s reach and genuine interest, Bridgestone India fosters a more dynamic and culturally relevant dialogue with its audience.

Rajiv Sharma, Executive Director – Sales & Marketing, Bridgestone India, said, “North India is a strategically important market for us. Parmish Verma’s credibility and deep connection with audiences make him an ideal partner to represent Bridgestone. This collaboration enables us to engage meaningfully with young consumers who seek fresh, inspiring and relatable brand experiences.”

Verma said, “Bridgestone is a brand people trust for safety and performance. I’m proud to be associated with an organisation that values quality and puts customers first. I look forward to connecting with audiences in a new and meaningful way through this partnership.”

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Bridgestone Americas has appointed Michele Herlein as its new Chief People Officer. In this role, she will oversee all human resources operations across the Americas, Europe, Middle East and Africa. Her primary focus will be advancing the company's Culture 2.0 initiative, which aims to enhance teammate empowerment, collaboration and accountability.

Herlein rejoins Bridgestone with over two decades of executive leadership expertise. Her background includes previous positions within Bridgestone Americas and Bandag, Inc., centred on culture, leadership development and succession planning. Most recently, she was the Founder and CEO of CultureMax and previously served as the Chief Administrative and Human Resource Officer at Barge Design Solutions. She is also a published authority on creating high-performance organisational cultures. Beyond her corporate work, Herlein is a co-founder of Impact100 Nashville, a philanthropic women’s collective that has awarded more than USD 1.2 million in grants to area nonprofits.

Scott Damon, Bridgestone West CEO and Group President of Bridgestone Americas, said, “I am excited to welcome her back to Bridgestone, recognising the perspective and presence she will add to our West leadership team, the HR function and the broader organisation.”

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