BEIJING—India's vehicle sales dropped precipitiously earlier this year, but the county's Automotive Tyre Manufacturers Association expects a rebound in fiscal year 2022.
Sales registered an 84 percent drop in February and a 61 percent drop in March and the pandemic is expected to lessen global vehicle production to 71 million units this year, down 20 percent from original estimates, the association's director general, Rajiv Budhraja, said at China Rubber Conference 2020 on June 5.
India is the world's fourth largest passenger vehicle producer and the second fastest growing country in overall vehicle production, trailing only China. The sub-continent's vehicle production has been growing at a 10 percent compound annual rate since 2000.
The country's GDP this year is forecast to shrink by as much as 0.5 percent. The India government has announced a $280 billion financial stimulus package, or 10 percent of its GDP.
India's automotive industry will rebound from fiscal year 2022 (April 2021-March 2022) onwards, Budhraja said.
India's tire industry will following the automotive industry with recovery expected in fiscal 2022, he added.
The country's tire industry turnover arrived at $9 billion in fiscal 2019 and exports amounted to $1.8 billion. Its 62 tire plants under 41 manufacturers are mostly located in the Southern rubber growing regions or along the west coast.
Port congestion and restrictions on interstate mobility has caused hardship in raw materials acquisition, and tapping has not fully resumed due to factors such as unattractive prices and dislocation of migrant tappers. India's lockdown is likely to result in a 50,000-ton loss in the country's natural rubber production this year, Budhraja said.
Today radial tires takes up 98 percent of India's passenger car tire production. The percentage for truck and bus tires has reached 51 percent and will climb to 65 percent over the next three or four years, said Budhraja.
A few new trends have also emerged, such as tire e-retailing, which is expected to account for 3-4 percent new tire sales in the passenger car segment by 2025, said Budhraja. Many manufacturers are testing the "CPKM" (cost per kilometers) model as well, where fleet owners subscribe and pay their fees based on kilometers run over a month.