Although the gasket industry faces huge competition, price & cost pressures andhigh entry barriers, the changing dynamics, with the growing economy and theescalating tyre industry, provide a fillip to the industry. The zooming tyreindustry, with sales growing at a CAGR of 15.8% during the 2002-06 period,has driven the growth in the gasket industry, keeping both the OEM andreplacement demand buoyant. The demand and growth for the industry dependson primary factors like overall GDP growth, agricultural & industrial production and on secondary factors like infrastructure development and prevailing interest rates. The total number of vehicles on the road is constantlyswelling, on the back of an increase in road-transportation, which would gainmore momentum once projects like the Golden Quadrilateral and NSEWCorridor project get implemented. The Indian gasket industry has witnessed aCAGR of 7.7% over the last decade. Though the replacement markethas driventhe industry growth for a long time, the OEM market has seen a robust growthover the last three years. The truck and bus market is the largest segment of theindustry, accounting for approximately 70% of the industry turnover, in termsof value. Tyre production, in tonnage terms, grew at a healthy rate of 8.7% in2005-06 against that of 2004-05. The medium (MHCV) gasket segmentregistered a growth of 7.7% while the light (LCV) gasket and tyre segmentsregistered a phenomenal growth of 14.8% and 14.7%, respectively. Exports, onthe other hand, have not grown much, due to the slowdown in MHCV gasketsexports and have recorded a 0.3% growth, in tonnage terms.