Close on the heels of global tyre majors Michelin, Continental and Bridgestone increasing their investments in India, Japanese tyre maker Yokohama is now reviving its plans to set up a passenger car tyre (PCR) plant in the country.

It is expected to invest Rs 765 crore in a 25-acre plot at Bahadurgarh, Haryana, which is expected to be ready in a year, an official from the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) told Business Line .

The company had purchased this land in 2008 and had planned for a manufacturing facility to be built in two years. However, it chose to push back its plans due to the global economic slowdown.

“Senior company officials from Japan visited the site very recently. It has given the building plan for approval with the State agency and has currently made just the boundary wall. They had purchased the plot back in 2008, but have said that they will build it in about a year's time,” the HSIIDC official said.

The official added that the original pact signed in 2008 between the Haryana Government and Yokohama was that a plant would be ready in three years, but the company had then extended it by another year. Now, a facility would need to be operational by 2012.

Yokohama India, which started operations in 2007, currently has a distribution business in the country with about 350 dealers. It has an around two per cent share of the PCR market, which has a size of one million tyres a month.

“We have enough land to set up a plant, so there is a definite plan for a factory. At present, we compete with premium tyre makers, so our pricing is 10-15 per cent higher than domestic brands. Our core strength is in the niche segment of high performance tyres,” a company official said. The increasing levels of interest from global tyre companies in investing in manufacturing facilities in India follow the rapid growth in auto sales and the growing popularity of radials over the last few years. The country is also one of the largest natural rubber producers in the world and with most auto majors setting up a plant, tyre makers expect a jump in Original Equipment sales.

“As we go forward, we are going to see segmentation in the Indian tyre market with brands like Michelin and Yokohama representing the top rung, followed by the domestic tyre brands such as Apollo and JK Tyre in the second segment. The third will be brands like TVS tyres,” a tyre industry expert said.

French firm Michelin's truck and bus radial plant with a 20 lakh unit a year capacity at Tamil Nadu is expected to roll out its first tyres by end-2012, while in July itself German company Continental bought out Modi Rubber's subsidiary Modi Tyres for about Rs 135 crore.

>roudra.b@thehindu.co.in

Related Topics