BKT, Pirelli plan 50:50 JV for passenger car tyres

The proposed partnership will have a four-member board, with each company nominating two directors and the chairperson rotating between the partners. Manufacturing capacity will be shared equally, with a new plant planned in India. In the interim, the offtake agreement will allow BKT to manufacture Pirelli-branded passenger car tyres at its existing PCR plant in Bhuj, Gujarat, following Pirelli's specifications.

Supplies will cater to Pirelli and its affiliates in India and overseas. Pirelli will commit to a minimum annual offtake, matched by BKT's corresponding capacity commitment. Pirelli will also grant BKT limited, non-exclusive rights to use specified know-how and trademarks for manufacturing these tyres. While BKT cannot manufacture comparable or competing PCR tyres for third parties, it can continue developing and selling its own branded passenger car tyres.

The offtake agreement will terminate once the JV becomes operational and can meet Pirelli's requirements. Otherwise, it will remain in force until December 31, 2031, with an option for mutual extension. Andrea Casaluci, CEO of Pirelli, 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. Rajiv Poddar, joint managing director of BKT, said Pirelli's selection recognised the company's manufacturing strength, quality and expertise. “Pirelli’s technological leadership and BKT’s industrial capabilities provide together a strong foundation for lasting values,” he said. BKT will pay for these services in euros under an agreed pricing schedule.

The framework agreement also restricts both companies from entering similar tyre-manufacturing joint ventures with third parties in India while it remains in force, excluding wholly owned plants.