Indian tire industry set for 'revenue surge' by 2047 – ATMA/PwC

New Delhi –India’s tire industry could deliver 12-fold revenue growth by fiscal year 2047, reaching INR13,000 billion (€125 billion), a joint study by the Automotive Tyre Manufacturers Association (ATMA) and PwC India found.

Production volumes are projected to rise by around 400% over the same period, underpinned by domestic OEM and replacement demand, as well as growth in vehicle exports, said a PwC summary issued 16 Sept.

Titled ‘Viksit Bharat 2047: Vision and roadmap for the Indian tire industry’, the report highlights “premiumisation,” rising raw material prices, exports, electrification and “servitisation” as the main drivers for growth.

“The Indian tire industry is at the cusp of a transformational journey,” said Arun Mammen, chairman of ATMA. The report “underscores the industry’s immense growth potential.”

The surge, according to Mammen, will be fuelled by a shift towards ‘premiumisation,’ sustainability-led innovation, and a strong focus on technology and exports.

According to the report, tire exports from India are on track to accelerate significantly by fiscal year 2047, supported by “targeted interventions.”

These, it said, include adopting “export-centric growth strategies” supported by market and use of "case specific innovations" as well as improved market access through newer free trade agreements.

Furthermore, improved cost competitiveness and brand positioning especially in passenger car and commercial tire segments will be among key factors aiding exports.

Also highlighted was the need to ensure “sustained and cost-competitive availability of natural rubber, dynamic regulatory environment, and non-tariff barriers.”

Domestically, the report noted OEM and replacement tire revenues are expected to grow at around 10% CAGR untill fiscal year 2047.

Rising passenger car and two-wheeler sales, along with robust commercial vehicle demand from infrastructure spending, will underpin OEM growth.

Replacement demand, meanwhile, will be supported by higher mobility and freight activity.

On the services side, professional tire management is set to expand “exponentially”, particularly among fleet operators.

The adoption of tire pressure monitoring systems and advisory services is expected to grow, though issues around scaling, data security and regulation will need to be resolved.

Commenting on the report, Kavan Mukhtyar, partner and automotive leader at PwC India, said the 2047 vision presented “a huge opportunity for the tire industry."

The vision, according to Mukhtyar, can both meet domestic demand and scale up tire exports.

Exports, Mukhtyar said, could expand strongly in commercial and passenger vehicle segments across the US and EU.

“Emerging mobility trends, sustainability imperatives and global business shifts give the Indian industry a unique opportunity to transform itself and drive sustainable growth through 2047.”

According to Mukhtyar, advanced material engineering, finding alternatives to natural rubber, and tackling sustainability challenges “throughout the value chain” will be central to this transformation.

PwC has set out a “CHARGE” framework to help the sector meet its 2047 goals, focusing on six levers: customer relevance, high-quality standards, adaptability, resilience and sustainability, growth through innovation, and empowering partnerships.