Yokohama Invests in Local Production for Sustainable Business in India.

Japanese tire manufacturer Yokohama is placing a strategic bet on local production in India to establish a "sustainable and competitive" business model in the country, as stated by a senior company official.

Yokohama Rubber Company, operating in India through its wholly-owned subsidiary, is currently in the process of setting up a new plant in Visakhapatnam, which will complement its existing facility in Bahadurgarh, Haryana.

Harinder Singh, Managing Director and CEO of Yokohama India, discussed the company's expansion plans with PTI. He highlighted the company's capacity to produce tires with diameters of up to 18 inches within the country and shared plans to extend this capability to accommodate tires up to 22 inches, thereby meeting the growing demand for larger-sized tires.

Singh expressed the company's support for the Indian government's decision to restrict tire imports into the country, noting, "Yokohama India supports this decision and recognizes the importance of investing in local production. Our investment in the Vizag plant reflects our commitment to the Make in India initiative and positions the company to capture a larger share of the premium SUV market by offering locally manufactured, high-end tires."

Furthermore, local production not only aids in cost reduction but also reduces lead times and dependence on imports, contributing to a more sustainable and competitive business model, Singh added.

The strategic move toward faster and more cost-effective localization, coupled with the ability to manufacture tires up to 22 inches in diameter, positions Yokohama to better serve the growing market demand for SUVs, MPVs, and premium vehicles in India, according to Singh.

In 2020, the Indian government imposed restrictions on the import of specific types of new pneumatic tires used in motor cars, buses, trucks, and motorcycles, with the aim of promoting domestic manufacturing. This change meant that tire companies could only import a limited number of tires into the country under a restricted import license, a significant departure from the previous regulations.

With the establishment of the new Visakhapatnam plant, Yokohama aims to better cater to the needs of Original Equipment Manufacturers (OEMs) and the aftermarket.

Expanding the range of products and production capabilities to include premium and larger tires is a strategic move in alignment with changing consumer preferences and the increasing demand for such tires in the Indian market, Singh explained.

Earlier this year, Yokohama announced plans to invest $82 million in establishing a production unit in Visakhapatnam to manufacture passenger car tires. This additional investment aims to increase the company's annual passenger car tire production capacity in India from the current 2.8 million to 4.5 million tires by 2025.

The new production line is scheduled to commence operations in the fourth quarter of 2024 and will have the capability to produce passenger car tires up to 22 inches in diameter.

Yokohama has also invested around $154 million in its Bahadurgarh plant. Singh emphasized that, through strategic investments, continuous improvement, and a focus on meeting customer needs, the company is making progress toward its goals of increased production capacity and market expansion in India.

Additionally, Yokohama has plans to enhance its sales infrastructure in India over the next few years. Singh stated, "Plans are in place to increase our footprint by 20 percent during this year and another 20 percent in the coming two years." Currently, the company boasts about 2,800 dealers and operates a network of more than 550 Yokohama Club Network (YCN) stores across the country.

Yokohama entered the Indian market in 2007 and continues to expand its presence with a keen focus on sustainability and meeting the evolving needs of the Indian automotive market.

HBL