NEW DELHI: India’s third-largest tire maker K Tire Industries plans to enter the two-wheeler segment through trade channels to avoid reinvesting in manufacturing facilities due to slowdown in the auto market. “We tentatively plan to outsource and sell two-wheeler tires,” Raghupati Singhania, CMD, JK Tire, said in an exclusive interview with The Economic Times. We are working on registering suppliers and looking for domestic and international suppliers. We will be aftermarket and original equipment manufacturers (OEMs) in this segment to provide services. ‘

The Delhi-based company currently manufactures four-wheeler, bus and truck tires and will be competing with giants MRF Partnership, Ceat and TVS in the two-wheeler segment. JK Tyres has taken a cautious approach amidst the uneven growth of the automobile industry. “We have to be extra cautious while making new investments. So far, no new announcements have been made. So, looking ahead, we will have to wait and see how the market develops before considering any investments. Deli said in an interview,” Deli said in an interview:

Domestic sales of two-wheelers have been growing year-on-year since 2009-10, exceeding 16 million units in 2014-15, while passenger car sales have never exceeded 2.66 million units since 2012-13. According to the website of the Society of Indian Automobile Manufacturers (SIAM), commercial vehicle sales fell sharply from 809,499 units to 614,961 units in 2011-12.

Currently, more than 80% of the tires imported from the Indian market are from China and most of them do not meet the standards set by the Bureau of Indian Standards.

Under free trade agreements with South Asian countries, imported finished tires can be imported at a rate of 6% to 10%, while raw natural rubber is subject to a 25% tariff. “Under the reverse tariff structure, it makes sense to import tires instead of manufacturing them.

But the key question is whether the government will impose anti-dumping tariffs on the tire industry, which is one of the demands of domestic tire manufacturers. This trade route could become unviable. Abdul Majeed, partner and automotive expert at PricewaterhouseCoopers, said: JK Tire expects to grow its sales by around 10% in the near future and hopes to meet the demand of industrial customers by selling off-road tires.