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Indian Tire Aftermarket on the Fast Track to Growth

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Indian Tire Aftermarket on the Fast Track to Growth

Mumbai, Maharashtra, India

India's booming automotive market due to its rapidly growing vehicle population has created an equally vibrant tire aftermarket. The country's sizeable and highly aspirational middle class is in a better position than ever before to purchase vehicles due to easy financing options, thereby driving the automotive market and in turn, the tire aftermarket.

New analysis from Frost & Sullivan (www.automotive.frost.com), Indian Tire Aftermarket, reveals that the aftermarket earned revenues of $1,461.7 million in 2005 and estimates this to reach $3,414.6 million in 2012.

"Additionally, brisk industrial activity has boosted the commercial vehicle (CV) population by increasing the movement of raw materials and finished goods," notes Frost & Sullivan Research Analyst S Satish Kumar. "The CV segment is witnessing particularly high replacement rates due to widespread overloading of vehicles and improper vehicle maintenance."

Overloading is one of the key drivers of the Indian tire aftermarket since it results in abnormal tire flexing and produces excessive amounts of heat within the tire, ultimately leading to its failure. Indifferent vehicle maintenance can significantly shorten the life of the tire, while bad driving patterns such as inappropriate braking and accelerating result in greater wear and tear.

However, the full potential of the Indian tire aftermarket is yet to be exploited due to the low levels of radialization in the CV segment. This is because the CV segment has traditionally preferred cross ply/bias tires for their ability to be retreaded more than once in their lifetime. Also, there is no suitable technology available for retreading radial tires, creating another major deterrent to their increased uptake.

"If the levels of radialization in the CV segment increase to match those of the passenger vehicle segment, potential revenues from the CV tire segment could increase dramatically due to the higher price of radial tries compared to bias/cross ply tires," says Kumar.

In a positive move for the tire aftermarket, recent efforts by various state governments to implement strict checks on CVs to prevent overloading are likely to help increase radialization in this segment. A drop in the number of overloading cases is bound to lead to a decline in demand for bias tires, which the CV segment has largely favored.

With demand for bias tires decreasing, radial tires could witness higher demand as fleet owners and State Transport Corporations (STCs) - that own the majority of CVs in India - realize their advantages such as longer life, lower fuel consumption, and improved safety and ride quality.

However, the import of cheap and low quality as well as used tires, both for CVs and passenger cars poses a significant threat to the Indian tire aftermarket. Importing such tires has become a relatively easy task due to the increased focus on Regional Trading Agreements (RTAs) and the lowering of import tariffs as a result of India's integration with the global economy.

The Indian Government is now formulating Automotive Industry Standards (AIS), which are likely to be merged with the Bureau of Indian Standards (BIS). These standards are expected to become mandatory by 2008 and applicable on tires made for domestic use as well as imported ones. Implementation of these standards is likely to go a long way in preventing the import of low-quality inexpensive products and protecting the interests of Indian tire manufacturers.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the latest analysis of the Indian Tire Aftermarket, then send an e-mail to Ravinder Kaur, Corporate Communications, at ravinder.kaur@frost.com with your full name, company name, title, telephone number, fax number, and corporate e-mail address. Upon receipt of the above information, an overview will be sent to you.

Indian Tire Aftermarket, part of the Automotive & Transportation Subscription, provides a detailed analysis of the various factors driving and restraining this market. It also provides detailed coverage of the passenger vehicle, CV, and two/three-wheeler segments. Key market factors such as radialization, imported tires, and distribution structure are discussed to explain the expected development of this market. Interviews with the press are available.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective, and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit www.frost.com.

Ravinder Kaur, Corporate Communications - South Asia, Middle East, Frost & Sullivan, +91 (044) 4204 4515 ravinder.kaur@frost.com

Vanessa Quezada, Corporate Communications - North America, Frost & Sullivan, 210.477.8427 vanessa.quezada@frost.com

Source: Frost & Sullivan (Business Wire India)

Press release presented here is sourced from the Source mentioned above and is provided on as-is basis. Please contact the Company / Source directly for any further information in regard to this release. This website will be unable to assist you in regard to the accuracy or correctness of information in this release.

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