ICRA: India's tire makers will fall in revenue

ICRA, an Indian credit rating agency, recently stated that due to insufficient supply of rubber, the agency expects Indian tire manufacturers to face falling earnings in the next year to a year and a half.

Despite strong demand for tires in the Indian market, ICRA believes that rising raw material prices, increased debt, high interest rates and depreciation expenses are all important factors affecting the mid-term profitability of tire manufacturing in the Indian market.

The agency said that within the business scope of India's truck and passenger car radial tire segment, the Indian tire industry faces constant competition from tires that China exports to the Indian market. The agency said that this has imposed at least some restrictions on tire production in India. In addition, trade agreements that are not conducive to India and Chinese tire products that have been low-priced have also caused suppliers to lose profits.

ICRA said that the agency expects that the supply of rubber will not increase significantly in the next year or one and a half years. Therefore, rubber prices will continue to rise.