Eastward, ahoy!

New Delhi, Jan. 4: Japanese tyre major Bridgestone Corp plans to set up a plant in India that will make truck radials and help it establish a firm foothold in the country, the world’s fifth biggest tyre market.

The tyre major’s local unit, Bridgestone ACC India, currently manufactures radial tyres for passenger cars and small vans at a factory located near Indore in Madhya Pradesh.

Sources said Bridgestone officials are preparing a project report on the size of production capacity and investments required to set up the plant, which will take around 18-24 months to build.

“They have realised the main growth driver is truck radials and not passenger car radials,” the official said, adding that the tyre major is currently test marketing its brand of truck radials.

Less than 2 per cent of truck and bus tyres are radials although commercial vehicle tyres make up more than 70 per cent of the $2.2 billion domestic tyre industry. In contrast, they comprise more than 75 per cent of car tyre sales.

Analysts said the country’s radial tyre market holds tremendous growth potential since it is in a nascent stage, which is forcing global tyre majors to set up manufacturing facilities.

In November, Apollo Tyres tied up with Europe’s biggest tyre maker Michelin to form Michelin Apollo Tyre Ltd which will make radial tyres for commercial vehicles and market Michelin tyres.

The new venture — in which Michelin will hold 51 per cent equity and Apollo 49 per cent — will invest Rs 322 crore to set up a manufacturing facility for truck radials.

“Radial tyres are safer, fuel efficient and more heat absorbent than normal tyres and demand is bound to pick up when the new road network comes into place,” the official said. “Radials account for 80 per cent of the heavy vehicle market in Europe and 60 per cent in the US,” he added.

But transporters said they have shied away from radial tyres as these are not rugged enough for appalling roads and overloaded trucks.

The government has planned to build 10,000 km of new roads and spend Rs 40,000 crore to accelerate growth in the country.

The main players in the domestic tyre industry, which had produced 85 lakh commercial vehicle tyres in 2002-03, are top-ranked MRF Ltd, Apollo Tyres and JK Industries.