Contrary to general consumer expectations, the domestic automotive industry posted relatively muted growth of around 5% during 2013-14, with a protracted slow down in the Medium and Heavy Commercial (M&HCV) segment. While the Light Commercial (LCV) segment managed to record a volume growth in 2012-13 supported by growth in the sub 3.5T segment, the overall economic scenario caught up with LCV demand during 2013-14, with the industry contracting by a sharp 14%. Passenger vehicles (PV) performance was weak during 2013-14, de-growing by 5% - marking the first instance of negative growth for the industry in over 12 years, according to ICRA Research.
''Tyre demand in 2013-14 is estimated to have grown by a muted 1%, largely aided by the two wheeler and tractor segments, even as demand from the LCV and PV segments faltered. This comes close on the heels of a 2% de-growth witnessed by the industry during 2012-13 due to contraction in the high volume two wheeler and tractor segments. Overall demand from the replacement segment was largely flat while OEM demand grows by a modest 2%-4%,'' said ICRA Research.
ICRA expects demand for tyres to grow by 6%-8% during 2014-15, driven largely by the Truck and Bus (T&B), PV and scooter segments. Replacement demand for T&B is also expected to grow as the economic activity in the country revives, thus leading to increased goods movement.
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