Truck tyre radialisation to save Rs 4000 crore for India: Crisil

Mumbai, Nov 30 (UNI) Truck tyre radialisation could result in Rs 4000 crore savings annually for the Indian economy, says a study conducted by CRISIL Research.

According to the study, these savings result from lower operating costs after adjusting for the higher price of radial tyres. In this context, Mr Sachin Mathur, Head, CRISIL Research adds: ''Even a 50 per cent radialisation level can yield savings equivalent to adiesel price-cut of around Rs 1.50 per litre, for the truck segment.'' A radial truck tyre is today priced higher than a bias-ply truck tyre, by 40 per cent, in the Indian market. However, radial tyres have a 50-60 per cent longer life, and enable an improvement of at least 5 per cent in fuel-efficiency. Since fuel and tyres account for a considerable portion of running costs for a truck, these savings can be significant for a truck owner, adding 4 per cent to his operating margin.

On an economy-wide basis, the benefits of a 50 per cent truck tyre radialisation are estimated at Rs 3,870 crores.

Of these, Rs 2,900 crores will accrue on account of fuel cost savings due to an expected improvement in fuel-efficiency, and Rs 970 crores in the form of savings on tyre replacement costs due to higher durability, even after allowing for retreading. These savings are equivalent to Rs 1.50 per litre of diesel consumed today by the medium and heavy trucks segment.

CRISIL Research believes that the likely reasons for low radial penetration (nearly 2 per cent) in medium and heavy truck tyres include inadequate awareness among transporters and lack of investment by tyre manufacturers in setting up truck radial manufacturing capacities and promoting radial tyres.

With increasing investments in improving the condition of Indian roads and efforts to curb overloading of trucks, there is a strong case for all stakeholders - including tyre manufacturers, vehicle manufacturers, and the government - to promote the use of radial truck tyres.

UNI SN OBB NV2016