An analyst report on the largest consumer of natural rubber which are the tyre industry in Kerala shows that there is a decline in the volume by 20 per cent in the last quarter of the last fiscal (LF).
The report said that, due to the ongoing COVID-19 pandemic, the tyre industry witnessed a decline in volume by 50 per cent year on year in March 20 which resulted in about 20 per cent fall in volume in the 4th quarter of financial year of 2020 according to a research done by Reliance securities.
The volumes of May 2020 saw a fall in 50 to 60 per cent. It is expected that the industry volumes would collapse by double digit numbers in the Financial Year of 2021 as per the report.
As per the report of Reliance Securities, it is a major blow for the tyre manufacturing industries since March till about June is the time period in which annual sales of 40 per cent is witnessed due to the higher probability of tyre wear and damage as a result of the hot climatic conditions.
It is believed that March-May is the prime season for higher sales of tractor tyres which is now distrupted due to the COVID-19 causing supply constraints.
Also see: Apollo Tyres Expects Upturn Of Demand In Replacement Market
Industry experts believe that the tyre industry will recover by July- August 2020 and demand for replacement tyres would see better sales period by September, 2020. Higher demand for truck tyres is possible followed by tractor tyres. The demand for non- commercial vehicle's tyres would remain dull due to the slow production and ongoing work from home trend.
The dealers on the highways are operational while 70- 80 per cent of dealerships in interior parts of cities are functional except for that containment areas. The metro cities and towns under lockdown and red zone is facing a loss in demand even though dealerships are open partially as per the report.
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