Yokohama India is expanding its production capacity and OEM partnerships to meet rising demand for high-performance tyres. As Indian consumers shift their preference from low-cost options to safety-focused SUV tyres, the company is positioning itself to capture a larger share of the automotive market.
Yokohama India is reshaping its business strategy to focus on premium, high-performance tyres as Indian buyers increasingly prioritize quality over price. The company, an unlisted subsidiary of the Japanese giant The Yokohama Rubber Co., is ramping up its original equipment manufacturer (OEM) partnerships and expanding its manufacturing presence to cater to a market that is rapidly moving away from 'cheap' tyre options.
Harinder Singh, Managing Director and Chief Executive Officer of Yokohama India, noted that the automotive market is seeing a clear evolution in buyer behavior. Two or three years ago, the focus was often on finding the most affordable tyre. Today, safety, performance, and durability have become the primary reasons for purchase, particularly among those owning SUVs and crossovers. This shift is fueling demand for larger, high-value tyre sizes, with the company seeing a significant portion of its sales coming from tyres measuring 16 inches and above.
To support this growth, Yokohama India is scaling its manufacturing capacity at its Visakhapatnam facility to 6.3 million units annually. This expansion is designed to support both domestic demand and export goals. The company is actively working to increase its partnerships with major Japanese and Indian automakers. While Yokohama currently supplies one major OEM in India, it aims to broaden this footprint as part of a four-to-five-year expansion plan.
Competitive Market and Sector Risks
The Indian tyre sector remains highly competitive, with established domestic giants like MRF, Apollo Tyres, and CEAT holding significant market share. Successfully expanding into the OEM segment requires competing against these incumbents on both price and product quality. For investors monitoring the sector, success for any player often depends on maintaining high capacity utilization while navigating fluctuations in raw material prices.
One of the most significant risks for the tyre industry is the volatility in prices of key raw materials, such as natural rubber. Because natural rubber is a primary input, any sharp increase in global prices can squeeze profit margins if the company cannot pass on costs to consumers. Additionally, since some raw materials are imported, currency exchange rate fluctuations can also increase operational costs.
Looking ahead, the next phase of growth for Yokohama India will depend on how effectively it executes its capacity expansion and whether it can secure new long-term supply contracts with leading automakers. Market watchers will also be tracking whether the company’s push into premium SUV tyres can generate sustained growth despite the intense rivalry from local competitors.