Tata Motors, Maruti and others likely to import tyres to overcome the shortage

2011 may witness the customers waiting for a long time for their cars as the car manufacturers are facing acute shortage of tyres in the domestic auto market. These auto mobile manufacturers are now looking at Thailand, Malaysia, Korea and China to meet the ends. For now the auto companies are focusing to import the tyres due to the shortage.

The auto companies in 2010 faced lower production; auto biggies such as Tata Motors, Hyundai Motors and Maruti Suzuki India are looking forward to import the tyre and assuming a 25 per cent increment in the manufacturing in the present year which was 28.14 lakh units in 2010.

The local tyre manufacturers are unable to fulfil the demand which is leading the auto biggies towards the international auto market.

A top official in Maruti Suzuki said that the supply of popular car models in 2010 has been affected majorly due to the shortage of the components. In 2011, the companies has set bigger targets which is diverting the auto mobile maker to the international auto markets. Maruti plans to manufacture 14 lakh cars in the coming financial year.

The car makers says that if the auto parts suppliers would have been consistent with the supply of the components, the auto companies would have been able to manufacturer 20 per cent more units in the last year. Lower production was one of the major causes of the long waiting time for the car models such as Toyota Innova, Volkswagen Polo and Maruti Swift.

The domestic auto industry absorbed more than 10 million tyres in 2010, the tyre supplies may face shortage of as much as 10 per cent of the demand and is assuming to fulfill the shortage through imports. There are various factors affecting the auto mobile production in India. The parts supply faced acute shortage as the demand increased suddenly in the last few months. Pawan Goenka, the President at Society of Indian Automotive Manufacturers, who also heads Mahindra & Mahindra Ltd., said that the unavailability of the tyres is a major concern however, it does not seem likely to have an immediate solution to the problem.

Ashok Leyland and Tata Motors have already started shipping the tyres from Thailand and Chinese auto markets to curb the domestic auto markets shortage. The issues which the auto giants faced were the increasing prices of the raw materials in 2010 apart from the shortage of the components. The natural rubber prices increased to Rs 270 per kg.

The tyre companies mainly supply 60 to 65 per cent of the manufacturing to the auto companies and then the rest of it for the after market. However, in 2010 the tyre maker suffixed the auto companies by supplying 50 per cent of its production.

As per the Automotive Tyre Manufacturers’ Association, the supply constraint is a commercial decision but still the tyre manufacturers are increasing the manufacturing capacity in the coming times.

Rajeev Budhiraja, the Director General at ATMA said that the tyre companies are increasing the production by investing to meet the increasing demand, however as per him, the current manufacturing is sufficient but the auto giants importing tyres can also be because the shipped tyres are cheaper when compared with the Indian tyre brands.

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