Pirelli, the tire maker based in Milan, Italy, and Balkrishna Industries (BKT), an off-highway tire maker in Mumbai, in western India, signed three agreements on October 22 to make premium passenger car tires in India, The Financial Express reported.
The agreements set up a joint venture that the two companies will own equally. It will build a new factory in India for passenger car radial tires.
Production starts sooner under a separate offtake agreement. BKT will make Pirelli-branded tires to Pirelli’s specifications at its existing plant in Bhuj, in the western state of Gujarat. Media reports say the target is up to 800,000 Pirelli-branded tires a year by 2030. The tires will supply Pirelli and its affiliates in India and overseas. Pirelli commits to a minimum annual purchase, and BKT commits matching capacity. Prices will follow actual raw material and conversion costs.
The offtake agreement ends once the joint venture is operating and can meet Pirelli’s needs. If that does not happen, it runs until December 2031, and the partners can extend it.
The joint venture will have a four-member board. Each company will name two directors, and the chair will rotate between them. Pirelli will give BKT limited, non-exclusive rights to use its know-how and trademarks. BKT cannot make comparable passenger car tires for other companies, but it can keep developing and selling its own passenger car tires. While the framework agreement is in force, neither partner can form a similar tire manufacturing venture in India with a third party, although wholly owned plants are excluded.
A separate service agreement has Pirelli provide technical support and testing for BKT-branded tires for cars, SUVs and two-wheelers, using its facilities outside India. BKT will pay for those services.
Andrea Casaluci, Pirelli’s chief executive, said the partnership combines BKT’s manufacturing capabilities and market knowledge with Pirelli’s technology and premium positioning. “The outlook for the national automotive market, and especially for the partnership’s premium products, is very promising. And the time is right to catch that wave,” he said, according to media reports. Rajiv Poddar, BKT’s joint managing director, said Pirelli’s choice recognizes the manufacturing strength, quality and expertise BKT has built over decades.
The deal moves BKT beyond its base in off-highway tires for farming, mining and construction. It gains a premium customer while it builds its own passenger car brand. The partners expect the premium car tire market in India to grow almost fivefold between 2025 and 2030.
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