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Thursday, September 21, 2023

New automobile companies to boost sales for the tyre industry

The entry of new automobile companies is expected to increase the sales for the domestic tyre businesses.

At a corporate briefing on Wednesday, officials of The General Tyre and Rubber Company of Pakistan said that after being plagued by smuggling since a very long time, the sector is hoping to experience a steep growth in sales.

The government has granted functioning licenses to six new entrants in order to create competition in the automobile sector under the Automotive Development Policy (ADP 2016-21) and the tyre industry expects to benefit greatly from it. According to market sources, volume of the auto industry is expected to rise in the ongoing fiscal year, which would be mainly led by the new entrants, car companies that have come under ADP 2016-21.

These new entrants include M/s Kia Lucky Motors Pvt Ltd, M/s United Motors (Pvt) Ltd, M/s Regal Automobile Industries Ltd, M/s Foton JW Auto Park (PVT) Ltd, M/s Master Motors Ltd and M/s Hyundai Nishat Motor (Pvt) Ltd.

Sale and production had remained low during the past year owing to the rapid spread of Covid19, however, the auto industry is now on a path of recovery as it plans to launch a large number of new cars in the year 2021.

A report released by Taurus Securities said that The General Tyre and Rubber Company of Pakistan expects demand for local tyres to climb following the establishment of new vehicle assembly plants coupled with government’s initiatives aimed at curbing smuggling.

Read More: Pakistan’s automotive industry shows unprecedented growth in FY21

A Taurus Securities official pointed out that the management of the company aims to improve sales in the tyre replacement segment and had also brought in new designs. The company was focusing on enhancing exports too, he added.

Rs93 million worth of products have been exported by the tyre manufacturing firms to various countries in the first half of current fiscal year 2020-21. The replacement tyre segment accounted for 62% of the company’s topline while the rest came from the original equipment manufacturers (OEM), the report stated.

During the corporate briefing, the management said that the company was constantly working to improve its products and operational efficiency. The company has recently acquired financing under the Temporary Economic Refinance Facility (TERF) and plans to introduce off-road tyres and crossover tyres in future, it was revealed.

The expansion of the auto sector along with the efforts to curb the smuggling of tyres via Afghan Border have put the domestic tyre manufacturers on a positive track and they are now anticipating a major increase in sales in the coming months.