Replacement market helps tyre cos end 2020 with better capacity utilisation

While sales to original equipment manufacturers declined 16.3% year on year in FY20, the replacement market sales declined by a modest 2.6% over the same period

Tyre makers have started seeing capacity utilisation going up on the backdrop of demand recovery, mainly driven by the replacement market. While some players have deferred part of the capex, some have decided to expand ont the hope that demand will be better in the coming fiscal.

According to Automotive Tyre Manufacturers' Association (ATMA), tyre production dropped by 30% during the first half of FY21 in view of lockdown and restrictions on mobility in the first quarter which severely hampered the production. Reduced demand from both replacement and OE segments also affected the production. Total tyre production went down by