India: Local Car Manufacturers Looking To Import Tyres.

Car manufacturers in India are looking to import tyres to make up for severe shortages in the local market. Local OEMs are now looking at China, Thailand, South Korea and Malaysia for tyres.

Vehicle manufacturers in India had to contend with component shortages in 2010 as well, which resulted in lower production for most. This year, car output is expected to rise by 25% from around 2.81 million cars produced last year.

"Inconsistent supply of tyre has hampered production for the major part of 2010. Keeping in view the higher production targets of 2011, we have planned tyre purchase overseas markets for meeting our long-term commitments, as we aim a 14-lakh units production in next fiscal," The Economic Times quotes a senior executive of Maruti Suzuki as saying, on condition of anonymity.

Vehicle manufacturers claim that sufficient supply of components would have enabled them to produce 20% more cars in 2010. Lower production has led to longer waiting periods for cars.

The local car industry bought more than 10 million tyres last year, and feels that this year, the tyre supply will fall short by around 10% of their demand. Local truck manufacturers such as Tata Motors and Ashok Leyland are already importing tyres from China and Thailand to offset domestic shortage.

"Keeping in view the buoyant market, several tyre companies are investing into new capacities that would cater to the increased demand. While current production is also adequate for the domestic automakers, importing tyres from overseas markets could also be a commercial decision, as some of the imported tyres are cheaper than the Indian ones," ET quotes Rajeev Budhiraja, director general of the Automotive Tyre Manufacturers' Association (ATMA), as saying.

Source : automotiveworld.com