Tyre Industry in India
1. THE TYRE MANUFACTURING INDUSTRY 2. PRESENTED BY: * NAME ROLL NO. * Arunn menon 1
3. INTRODUCTION * Faces huge competition, cost and price pressure. * The zooming auto industry has driven the growth. * The number of vehicles is swelling. * The truck and bus market is the largest segment in terms of value. 4. * Economic expansion and road development has made a contribution. * eg. The golden quadrilateral and the NSEW Corridor project. * Though the volumes have increased the profitability has gone down due to the increase in raw material cost. 5. Five forces model 6. A 2 tier Industry * Tier 1 players * Present in all three segment - * 1)Replacement market * 2)Original equipment manufacture(OEMs) * 3)Export * Tier 2 player 7. Key Players 8. Major Sales Segment 9. Intensity of Rivalry : High * The tyre industry in India is fairly concentrated, with the top 5 companies accounting for more than 80% of the total production of tyres. 10. BARGAINING POWER OF SUPPLIERS - High 11. 12. * Number of Suppliers – Low * Availability/ acceptability of raw material substitutes – Low * Switching costs – High * Threat of forward integration – High * Tyre industry not the key customer 13. Demand for Tyres 14. Bargaining Power of Buyers * OEM’s High * In Replacement Market Moderate * Switching Cost Low * Threats of Backward Integration Low 15. THREAT OF POTENTIAL ENTRANTS * LOW, due to HIGH ENTRY BARRIERS 16. ENTRY BARRIERS * Highly capital intensive industry * Rs4bn for radial tyre plant with a capacity of 1.5mn tyres * Rs1.5-2bn for a crossply tyre plant of a capacity to manufacture 1.5mn tyres
3. INTRODUCTION * Faces huge competition, cost and price pressure. * The zooming auto industry has driven the growth. * The number of vehicles is swelling. * The truck and bus market is the largest segment in terms of value. 4. * Economic expansion and road development has made a contribution. * eg. The golden quadrilateral and the NSEW Corridor project. * Though the volumes have increased the profitability has gone down due to the increase in raw material cost. 5. Five forces model 6. A 2 tier Industry * Tier 1 players * Present in all three segment - * 1)Replacement market * 2)Original equipment manufacture(OEMs) * 3)Export * Tier 2 player 7. Key Players 8. Major Sales Segment 9. Intensity of Rivalry : High * The tyre industry in India is fairly concentrated, with the top 5 companies accounting for more than 80% of the total production of tyres. 10. BARGAINING POWER OF SUPPLIERS - High 11. 12. * Number of Suppliers – Low * Availability/ acceptability of raw material substitutes – Low * Switching costs – High * Threat of forward integration – High * Tyre industry not the key customer 13. Demand for Tyres 14. Bargaining Power of Buyers * OEM’s High * In Replacement Market Moderate * Switching Cost Low * Threats of Backward Integration Low 15. THREAT OF POTENTIAL ENTRANTS * LOW, due to HIGH ENTRY BARRIERS 16. ENTRY BARRIERS * Highly capital intensive industry * Rs4bn for radial tyre plant with a capacity of 1.5mn tyres * Rs1.5-2bn for a crossply tyre plant of a capacity to manufacture 1.5mn tyres