The Indian tyre industry will be able to scale a turnover of Rs 1 lakh crore in the next three years on the back of new capacities available, Automotive Tyre Manufacturers Association said on Wednesday.
The industry has completed investment of Rs 35,000 crore in the last three years in new capacity creation and debottlenecking.
"The new capacities will go on stream over the next couple of years to meet the growing demand in an economy that is poised to remain as the fastest growing for the next few years," Automotive Tyre Manufacturers Association (ATMA) said in a statement.
Demand is expected to grow stronger in view of an uptick in economic activities and the big push envisaged for infrastructure growth.
"The new capacity will help the industry notch a turnover of Rs 1 lakh crore in the next 3 years from Rs 75,000 crore currently," ATMA said.
"The investments that have been undertaken in a challenging time period, span across all the key tyre segments with major beneficiary being truck and bus radials (TBR) and passenger car radials (PCR) manufacturing," ATMA Chairman Satish Sharma said.
Although the external environment continues to be challenging, ATMA said, there are several tailwinds to tyre sector's growth domestically.
"Different segments of the Auto sector have already reached or are reaching pre-pandemic levels in size and scale aiding demand for tyres," it said adding, premiumisation of the passenger car market with a clear preference for SUVs is creating an exponential rise in demand for higher profile tyres for 16-inch wheels and above.
Sharma said a policy and regulatory environment in India is geared to encourage competitiveness of the industry.
Phasing out of old vehicles and non-renewal of registration of 15-year-old government vehicles will create a demand for new vehicles benefiting a host of associated sectors, including tyre and kick off a cycle of economic growth, he added.
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