Automotive Tyre Manufacturers’ Association (ATMA) is a well-known tyre industry body in India. ATMA is the voice of the Indian tyre industry and its activities focus on promoting, representing and communicating the tyre industry interests primarily by acting as conduit between the Government and the industry.
With a strong acceleration in Indian GDP growth, automotive and tyre segment has registered a remarkable growth that led India to take a prominent position in the global rubber economy in 2018.
In the world tyre manufacturing sector, the Indian tyre industry has won global recognition in terms of innovative technology, processes, practices and quality of products. As a preferred destination for investments in the tyre sector, major global tyre companies have manufacturing operation in India and leading Indian tyre companies have overseas manufacturing operations and export market penetration.
Mr K M Mammen (Chairman & Managing Director, MRF Ltd) has been elected as Chairman of Automotive Tyre Manufacturers’ Association (ATMA). In this interview, Mr Mammen talks about India’s strength in the global tyre industry, its priority in addressing tyre safety and eco-consciousness and need for collaboration to embrace mobility ecosystem changes and circular economy challenges in India.
IRSG: What is the latest view on Indian Automotive Industry’s global positioning and key milestones in tyre industry?
Chairman, ATMA: Indian Automotive Industry is one of the fastest growing in the world. In global ranking, Indian Automotive Industry has gone several notches up in the last one decade and currently counts as the fourth largest in the world. The industry is expected to become the third largest by the year 2022. India overtook China to become the largest 2-Wheeler manufacturer in the world a couple of years ago. In manufacturing of Tractors too, India ranks at the top in the world. In Bus segment, India ranks 2nd while in case of Heavy Trucks, the country ranks 3rd in the world. So India holds an important place on the automotive map of the world.
Automobile revolution in India has been perfectly matched by enhanced capacities and R&D in tyre manufacturing. India produces one of the largest categories of tyres produced anywhere in the world. Tyre production in India has witnessed fast growth from 80 million units to 180 million units in the last 10 years. State-of-the-art Truck & Bus radial tyre manufacturing units in India vie with the best in the world. The country is home to 4 of the 30 largest tyre companies in the world, second only to China. India is a key destination for both greenfield and brownfield tyre investments.
IRSG: Sharp growth in rubber consumption in recent years has changed India’s sustained position in raw materials. What is ATMA’s view on this changed scenario and industry solution to address this?
Chairman, ATMA: Natural Rubber is a key raw material accounting for 40% of the total production cost of a tyre in India. The country is second largest in consumption of NR after China. In the year 2018 while China’s NR consumption went up by 5%, India’s NR consumption went up by 20%.
In NR production, however, India’s rank has slipped to 6th in the world. The domestic NR production consumption gap is widening in India as production has been slackening in the last few years for a variety of reasons. The state of Kerala which accounts for more than 80% NR production in the country has reached saturation stage in terms of the area covered (of course there is scope for improving productivity in Kerala too).
However, North East of India has large untapped potential for increasing NR production. ATMA has already sent a study mission to North East India for evaluating the NR potential and has submitted a report to the Government of India. ATMA delegation has met the Chief Minister of Tripura, a state in North East which is second largest rubber producer in the country and parleys are on with State administration.
Indian Tyre Industry is all for a verdant domestic Rubber plantation sector and has shown its commitment towards the same by aligning with Rubber Board of India in improving quality of rubber produced.
IRSG: Given the negligible share of EVs in India and policy commitments to attain certain target by 2030, customer focus and requirements are changing from product to product solutions. How ATMA is foreseeing supply chain partnership to address regulatory framework, tyre safety, environmental issues, capacity building and ELT management towards a greater sustainable future?
Chairman, ATMA: It is heartening to note that Auto OEMs and tyre companies are working in closer collaboration, aided in no less measure by ATMA Annual Convention which is focussed sharply on redefining Tyre Industry-Auto OEMs partnership. As a matter of fact, recently held ATMA Convention held deliberations on all the topics you have just mentioned.
Meeting new regulatory framework is a major issue in India. In few months from now, India will make a transition to BSVI emission standards from BSIV currently, skipping BSV altogether. What other countries have taken 10-12 years, India will be achieving that transition from BS IV to BSVI in three years’ time. Meeting such stiff regulatory stance requires a concerted approach and that is what Auto OEMs and tyre partners are engaged in.
Capacity building is another area that Indian Tyre Industry has taken rather seriously. The production by tyre industry has been ahead of the demand curve in the last few years. Automobile revolution has been matched by setting up of new tyre manufacturing capacities. While a new vehicle is being conceived, tyre industry is ready with the fitments. In a break from the past, Auto OEMs have practically stopped importing tyres and are rolling out vehicles on Indian tyres. In fact lot of global auto majors are exporting vehicles from India fitted with Indian tyres signifying higher confidence in quality of Indian manufactured tyres.
Tyre safety and environment protection are currently two focus areas for the Indian Tyre Industry. While Auto industry body SIAM celebrates Road safety Week, ATMA too celebrates Tyre Safety awareness week. In the last one year, major school and university connect programmes have been launched aimed at raising awareness on tyre safety. ATMA has joined hands with Auto OEMs such as Honda Cars for tyre safety drives.
IRSG: Along with product innovation, technology upgradation and improved overall quality, the business case for supply chain sustainability is growing and it focuses on traceability and risk mitigation. How ATMA members address this topic using technology as enabler in resolving risk involved in supply chain?
Chairman, ATMA: As you know, tyre manufacturing is a complex business. A significantly large number of raw-materials go into making a tyre. Moreover, for the most part, tyre is a continuous process industry. So it is essential that supply chain is secured.
Being capital intensive and employment intensive makes it all the more critical that manufacturing process in a tyre plant continues uninterrupted. Any interruption could impact competitiveness. Under such circumstances, tyre companies have devised ways and means to secure supplies of raw materials. A variety of inventory management software and technologies such as just-in-time are being extensively used. ATMA Supply Chain & Resources Group (one of the 4 key experts groups) studies the supply chain scenario continuously and publishes studies to help members take informed decisions.
IRSG: With a strong membership participation of all leading Indian and global major tyre companies, how ATMA collaborate with other rubber associations as well as R&D organisations to address current rubber industry challenges?
Chairman, ATMA: Yes, Rubber/ Tyre Industry is beset with challenges world over which cannot be addressed in silos. Industry associations need to collaborate and in that regard, ATMA has forged close linkages with ETRMA (Europe) and JATMA (Japan).
Indian delegations have visited Japan and Europe and similarly delegations from ETRMA/ ETRTO and JATMA have visited India. The focus areas where different associations have been sharing practices include End of Life of Tyre Management, Issues faced with respect to tyre safety and Environmental Issues including regulations pertaining to limited usage of raw materials with potential risk. Tyre labelling and development of tyres for electric vehicles are currently other areas of cooperation between associations.
IRSG: ATMA is one among the longstanding industry associate of the IRSG. How do you envision the Indian tyre industry’s collaboration with rubber industry stakeholders and governments through the global platform of IRSG offering better solutions addressing current industry challenges for a sustainable future growth?
Chairman, ATMA: India is privileged to be a member of IRSG and Indian Tyre Industry is playing its key role in meeting the exalted objectives that IRSG has set out for the sector. Indian Tyre Industry is well conscious of the leadership role it is playing and is increasingly poised to play in the emerging global scenario. India is a preferred destination for new brownfield and greenfield investments in tyre manufacturing. As a matter of fact, 6 of the top 10 global tyre majors have a presence in India and are manufacturing in India too. That makes India as one of the most competitive markets in the world.
Indian tyre companies are holding fort amidst rising competition. The range of tyres being manufactured by Indian companies is one of the widest in the world and ranges from bullock cart to fighter jets. The R&D spend by Indian Tyre industry has gone up by four times in the last one decade and currently matches with the average R&D spend by global tyre companies worldwide.
Major research is currently on to use raw materials which have low carbon footprint. As such, Indian Tyre Industry predominantly uses natural rubber which is a far more sustainable material. ATMA has created a platform called as ATMA Partners Summit where Tyre Industry and raw material partners meet and discuss ways and means to make the entire industry sustainable and competitive. These sessions have been highly exciting and the symbiotic relationship between the industry and supply chain partners has been redefined. The next Partners summit is scheduled to be held in October this year in New Delhi.
Sustainability is no more a catchword today. In fact automobile ecosystem is undergoing a metamorphosis of sorts to meet newer demands of sustainability and environment protection. Indian tyre industry is matching efforts and is intensely involved in developing new generation tyres which set a new benchmark in sustainability. For instance in development of tyres for electric vehicles which are poised to make an overwhelming presence in the days to come.
Author of the Blog:
Mr K M Mammen, Chairman, Automotive Tyre Manufacturers’ Association (ATMA)