CEAT commits ₹450 crore to lift Chennai PCUV tyre output 35%

CEAT Ltd has approved a ₹450 crore capital expenditure programme aimed at boosting passenger-car and utility-vehicle (PCUV) tyre production at its Chennai facility by roughly one-third. The move underscores the RPG Group company’s confidence in sustained demand for SUVs and higher-margin replacement tyres in India.

Investment details

• Board approval & funding – The outlay, cleared unanimously by CEAT’s board, will be financed through a mix of internal accruals and fresh debt, in line with the firm’s disciplined capital structure.
• Part of wider capex – The project sits within CEAT’s FY 2025-26 capex envelope of ₹900-1,000 crore, earmarked mainly for PCUV and truck/bus radial capacity adds after ₹946 crore was spent last year.

Capacity and timeline

The Chennai plant in Kanchipuram currently turns out about 7 million tyres a year at 80 % utilisation. A phased expansion will lift PCUV capacity by 35 %, with full ramp-up targeted by the end of FY 2027.

Financial backdrop

In Q1 FY 2026 CEAT posted:

The dip in profit was attributed to marketing spend and input costs, but capacity utilisation remained high across plants.

Market outlook

IMARC projects India’s tyre market will expand from 202.2 million units in 2024 to 263.8 million units by 2033, a 2.85 % CAGR, driven by replacement demand and rising vehicle production. This underpins CEAT’s medium-term growth expectations in the PCUV segment.

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CEAT okays ₹450 crore to boost Chennai PCUV tyre output 35 %, aligning with ₹1,000 crore FY 26 capex plan and India’s growing replacement-tyre demand.

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Tagged with: CEAT, PCUV tyres, Chennai plant, capacity expansion, passenger car tyres, utility vehicle tyres, Indian tyre market

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