CEAT announces ₹450 crore expansion at Sriperumbudur plant to increase PCUV tyre production by 35%. Expected completion by FY27.
Tyre Major to Boost PCUV Production Capacity by 35% at Sriperumbudur Facility
Chennai, July 18, 2025: CEAT Limited, the flagship tyre manufacturer of RPG Enterprises, has unveiled plans to invest ₹450 crore in expanding its Sriperumbudur plant near Chennai, marking a significant push to capture growing demand in India’s passenger vehicle tyre market.
Key Expansion Details
✔ Investment: ₹450 crore (mix of internal accruals and debt)
✔ Current Capacity: 70 lakh tyres annually at 80% utilization
✔ Capacity Addition: 35% increase (approximately 25 lakh additional tyres/year)
✔ Segment Focus: Passenger Car & Utility Vehicle (PCUV) tyres
✔ Operational Timeline: Expected by FY27
Strategic Rationale Behind the Expansion
1. Meeting Surging Domestic Demand
- Rising vehicle sales across SUVs, MPVs and premium hatchbacks
- Changing consumer preferences favoring larger wheel sizes and premium tyres
- Tamil Nadu’s auto hub status with 40% of India’s vehicle production
2. Strengthening Export Capabilities
- Chennai plant serves Middle East, Africa and Southeast Asian markets
- Expansion to enhance CEAT’s competitiveness against MRF, Apollo and global brands
3. Future-Proofing Manufacturing
- Aligns with BS-VI Phase 2 and upcoming CAFE-III norms
- Prepares for EV-specific tyre requirements as electric adoption grows
Management Commentary
CEAT Spokesperson stated:
“This investment underscores our confidence in India’s automotive growth story. The Chennai expansion will help us better serve both domestic OEMs and aftermarket demands while strengthening our export capabilities. We’re particularly bullish on the PCUV segment where we see sustained growth potential.”
Market Context: India’s Tyre Industry Trends
📈 Projected Growth:
- PCUV tyre market to grow at 8-9% CAGR (2025-2030)
- Replacement market accounts for 65% of industry volumes
🚗 OEM Partnerships:
- CEAT supplies to Maruti Suzuki, Hyundai, Tata Motors, Kia
- Increasing fitments in compact SUVs (Brezza, Venue, Nexon)
🌍 Export Potential:
- India exported $2.8 billion worth of tyres in FY24
- CEAT currently exports to 85+ countries
Competitive Landscape
| Player | Recent Capacity Expansion | Focus Segment |
|---|---|---|
| MRF | ₹1,000 cr in Tamil Nadu/Telangana | Premium PCR, EV tyres |
| Apollo | ₹2,000 cr for Andhra Pradesh plant | Radial tyres, exports |
| JK Tyre | ₹800 cr for Chennai capacity boost | Truck/bus radials |
| CEAT | ₹450 cr (current announcement) | PCUV, exports |
Environmental & Employment Impact
♻ Sustainability Measures:
- Plant already uses 30% renewable energy
- Water positivity initiatives in place
👷 Employment Generation:
- Expected to create 500+ direct/indirect jobs
- Technical training programs for local workforce