JK Tyre & Industries Ltd. has made a strategic decision to redirect its exports from India to the U.S. towards other global markets. This move comes in response to the substantial 50% tariff recently imposed by the U.S. government, as confirmed by Managing Director Anshuman Singhania.
Speaking at a media event at the company’s Chennai plant, Singhania highlighted the necessity for Indian industries to reassess their strategies concerning the American market. “America is a region where every industry from India needs to reconsider and realign its approach. We are currently uncertain about the future strategies that will unfold. However, at JK Tyre, we have mitigated our risk by diversifying our exports to other regions,” he explained.
Specifically, Mr. Singhania mentioned, “We have successfully rerouted our exports to various markets, including Latin America, Brazil, and other countries where we already have an established presence.”
For the U.S. markets, the company continues its operations through its Mexican facility. Singhania noted a temporary reprieve, stating, “There’s a current postponement of tariffs on tyre exports from Mexico to the U.S. for approximately 90 days. Furthermore, we are leveraging the benefits of the United States-Mexico-Canada Agreement (USMCA), which allows for zero duty exports.”
Exports currently represent between 12-15% of JK Tyre’s total revenue. The company is actively expanding its global footprint. “We have a strong presence in the Middle East, and we see significant untapped potential in Europe. We are confident that our growth in these regions will be robust as we develop new products. Our goal is to aggressively push our offerings into European countries by the end of the upcoming financial year,” Mr. Singhania revealed.
He anticipates that exports will contribute to a mid-to-high single-digit growth. While hopeful for a resolution, Singhania added, “With ongoing discussions between the Indian government and the U.S., we remain optimistic about finding a favorable solution to the tariff situation.”
Domestically, Mr. Singhania foresees a positive outlook for demand. He expects the automotive industry to expand by 8-9%, driven by factors such as a good monsoon season, increasing rural demand, and recent GST rate reductions.
The company has invested a significant ₹2,600 crore in its Chennai plant, which commenced operations in 2012.
Currently, the Chennai plant boasts a production capacity of 350 tonnes per day, manufacturing both truck bus radial and passenger car radial tyres. This plant alone contributes to 20% of the company’s overall turnover.
Regarding future plans, Mr. Singhania stated, “The Chennai plant is operating at 90% capacity utilization, with the potential to scale up to 600 tonnes per day. We will assess market conditions and make a decision on further expansion in due course.”