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We conducted tyre-focused channel checks in Madhya Pradesh to understand the demand dynamics in the replacement market. Our channel checks suggest that demand in the replacement market for passenger car radials and two-wheelers continue to remain stable while demand for the trucks and bus segments is muted.
Most of the tyre dealers indicated that trucks-bus growth is flattish to lower single-digit over last year. The tepid demand scenario for the trucks-bus replacement market is primarily on account of elongated replacement cycles amid rising costs.
We also note that the base for last year was high. However, most dealers are optimistic about demand recovering from Q4 FY23 onwards.
On the pricing front, most of the original equipment manufacturers have restrained from price hikes on the trucks-bus side while on passenger car radial and two-wheeler side, there has been a marginal hike of 1.5-2% over Q2 FY23.
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