Indian tyre companies are ramping up their passenger car radial (PCR) capacities in light

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of expected growth in the passenger car segment and to tap export potential. PCR segment has been seeing robust growth in the recent past on the back of high growth in the passenger car segment, following a rising economy and disposable incomes, according to industry observers.

During 2007-08, the passenger car segment posted about 12 per cent growth, while commercial vehicles, including trucks and buses reported 4 per cent growth and two-wheelers clocked a negative growth of about 8 per cent.

Despite the slowdown in the auto sector last fiscal, production of passenger car radials have gone up by 15.4 per cent during April-December 2007, as compared with April-December 2006, on the back of growth in replacement segment.

MRF, the first Indian tyre company to breach Rs 5,000 crore revenue mark, is investing about Rs 900 crore to beef up its passenger car radial tyre production capacity by setting up a greenfield unit in Tamil Nadu. In the first phase, the facility will have capacity of 3.5 lakh radial tyres for the passenger cars and in the second phase, the capacity will be scaled up to 7 lakh units. The plant is expected to commence production by October 2009.

Koshy Verghese, executive vice-president – marketing, MRF pointed out that several factors were driving the radial tyre capacity overdrive. These include buoyant growth of passenger car industry, a bulging after-market segment, entry of global carmakers into the country and business potential in the export market.

MRF expects the contribution of passenger car radial tyre segment’s revenues to go up significantly in the coming years from the current 20 per cent.

With an eye to be a major player in the PCR segment, another leading Indian tyre marker Apollo Tyres is ramping up its passenger car radial capacity from 3 lakh units a year to 4.5 lakh units. The expansion includes setting up of a new plant near Chennai at an investment of about Rs 500 crore, spread over five years.

J K Tyre, a pioneer in radial tyres and third largest tyre manufacturer in India, is also looking at expanding its radial tyre capacity from 4.5 million units to 7 million units over the next three-four years.

Car radial tyre production at Ceat Tyres, part of the RPG Group, has been expanded from 35,000 units a year to 60,000 units a year as part of its focus on high margin specialty tyre segments. In addition, Bridgestone India and Goodyear are also expanding their PCR capacities. Indian PCR segment is dominated by MRF, JK Tyres, Bridgestone, Apollo and Goodyear.