The Indian tire industry is steadily recovering after the outbreak. Goodyear India Ltd. said it expects a favorable long-term outlook for COVID-19 given its pandemic impact. With the consumer tire industry slowly and steadily shifting to the premium and SUV segments (driven primarily by growth in SUVs), the company said this trend “is expected to create opportunities for profitable growth in the business.”

Sandep Mahajan, chairman and managing director of Goodyear India, wrote in his address to shareholders at the annual general meeting in 2019: “It is positive,” the company wrote in its 2020-211 annual report.

He added that the growing middle class, low car penetration, and personal travel trends during the epidemic are expected to boost future car sales, reflecting positive momentum in the aftermarket.

In its latest annual report, Goodyear India said, “Demand in the consumer tire industry is slowly but steadily shifting towards the premium and SUV segments, comprising mainly of SUVs This growth is expected to result in profit growth for the business.”

Despite the industry facing headwinds in 2020 due to the COVID-19 pandemic, “it is now steadily recovering and the long-term outlook is expected to be favorable,” he added.

The company also said that government policies and interventions on import restrictions have had a favorable impact on the domestic tire manufacturing industry.

In the tractor tire segment, Goodyear India said the industry is again facing headwinds due to short-term business disruptions caused by the second wave of the COVID-19 pandemic.

“However, we are optimistic that India will remain the largest tractor market in the world in the medium to long term. Despite its dependence on this country, all major OEMs are involved in this category.” :India has a high share of agriculture but the lowest rate of agricultural mechanization, making it a market with high growth potential for the tractor industry.

The report quoted CRISIL as saying, “For the agricultural tire industry, the growth outlook is expected to be 6-8% in the medium to long term (3-5 years),” and that “tractor penetration is low because of lack of penetration.” With the increase in physical migrant labor, the increasing trend of mechanization will help stimulate the overall demand.”

In addition, the government’s policy reforms to improve rural incomes by increasing the minimum support price (MSP) will also supplement the growth in demand, the company said.