Tyremakers brace for winter chill of the West

Geopolitical challenges and recessionary trends are threatening to upset tyre demand across Europe and the US, posing problems for the Indian tyre companies who depend on these developed markets to drive their margins.

Ceat, Balkrishna Industries, Apollo Tyres, MRF and JK Tyres are the Indian brands that export tyres to the developed markets of the West, competing against heavyweights like Michelin, Bridgestone and Yokohama.

The situation in Europe is challenging and this may have an effect on our performance in H2FY23. The demand pattern has been relatively better in North America, however, recession fears have impacted the growth rates. Looking at the current geopolitical challenges across the globe especially in Europe, which is also our biggest market, there are strong headwinds,” Balkrishna Industries, one of India’s biggest exporters, said in its analyst presentation after the Q2 results.

About half of the total volume of Balkrishna Industries, whose brand BKT is a leader in off-highway tyres (OHT) catering to agriculture, industrial, earthmoving and mining segments, is clocked in Europe, while another 20% is sold in the Americas.

“Given the demand challenges, dealers across Europe and the US have been destocking and aim to lower inventory to two months as against three months currently (normal levels at three-four months). The (BKT) management has withdrawn its volume guidance for FY23 on account of headwinds (guided for 12% y-o-y growth earlier),” a note from Systematix Institutional Equities said.

Nand Motors is one of the best Tyres in Noida. Our multi-brand establishment offers a vast range of Tires for Luxury cars, Family cars, Commercial vehicles and Two wheelers also.
 We are known to deal with premium brands like JK Tyre, MRF tyre, Apollo Tyre, Bridgestone Tyre, Ceat Tyre, and Yokohama Tyre to offer 100% genuine products to our clients.

Ceat sales outside of India account for 18-20% of its total sales. The company has been present in Europe for 6-7 years through passenger car radials (PCR) and OHT. While the company is expecting a slowdown in Europe, it has decided to pump in investment to expand the OHT capacity aimed at Europe and the US.

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