Domestic tyre sales rebound in June, Auto News, ET Auto

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Tractor, two-wheeler and light commercial vehicle (LCV) tyre sales zoomed in June.Kochi: After two months of poor growth, tyre sales in the country, except that in original equipment (OE), rebounded in June and the trend is expected to continue in July too.

The replacement tyres in all the sectors did well as production cuts by vehicle manufacturers and falling income from job losses and salary cuts hit OE purchases. “It is the pent-up demand from April and May. We expect robust demand in the current month too,’’ said Rajiv Budhraja, director general of Automotive Tyre Manufacturers’ Association.

Tractor, two-wheeler and light commercial vehicle (LCV) tyre sales zoomed in June. “Increase in online purchases saw greater movement of LCVs while people have become more dependent on two wheelers for commuting in the absence of public transport,’’ he said.

With several vehicle companies yet to attain full capacity utilisation, the OE sales have plunged. Weak demand too aided the fall. “The OE sales are down by 60 to 70%. As the demand is beginning to look up car companies such as Maruti and Hyundai have ramped up production,’’ said Anup Mangasseri, senior vice president, sales, CEAT Tyres.

According to Mangasseri, tyre sales were moderate in May after plummeting in April. “ The sales in June are near record levels and are better than a year ago,’’ he added.

A research report by investment services firm Geojit says in the coming quarters the auto sector is likely to witness gradual recovery with likely improvement in economic activities. “ We expect QoQ improvement in total auto sales from Q2FY21 onwards to Q3FY21 and Q4FY21 of 8% & 14% respectively.’’

Tractor segment is expected to have healthy sales while passenger vehicle and commercial vehicle demand will improve gradually with a larger pick-up in FY22. Sanctity of the tyre sector will be helped by replacement, restriction in tyre import and low raw material cost, the report points out.

Though the tyre industry is not facing a raw material problem at present, the delay in import clearance, it is feared, may affect the operations in the coming months. “Import of rubber chemicals and steel tyre cords are stuck at ports pending clearance,’’ Budhraja said

The tyre companies currently have adequate stock of natural rubber because of the low production at factories in April and May and may need to replenish them only as demand picks up further. Narrowing the difference between Indian and international NR prices and decline in consumption may force the tyre industry to cut import of rubber. The annual consumption of NR in the country is likely to decline by 2 lakh tonnes to 9-10 lakh tonnes, according to market experts.

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