To grow stronger, JK Tyre has opted for a multi-thronged approach.
The cyclic nature of the CV industry, and the recent events have added a dimension to how auto companies operate. The priorities and strategies of auto companies are changing. Leading truck and bus tyre manufacturer, JK Tyre and Industries is banking on a multi-thronged strategy to keep growing, to tackle challenges. Strengthening its market presence in a tough environment, JK Tyres and Industries, according to Vikram Malhotra, the marketing director, is exploiting, the multi-thronged strategy to combat flattening sales. The company, over the past two quarters, launched a series of tyres for the LCV and SCV market segment. “We strengthened our market presence by launching high mileage Jetway JUH5, Jet R Xtra Miles, Jet One for the LCV radial and bias segment despite the tough market conditions,” mentioned Malhotra. “The SCV segment portfolio will also now have our Jumbo King tyre moving forward,” he expressed. With CV sales lacking in the first quarter of the current fiscal, Malhotra is banking on an exciting next quarter. CV sales picked up some speed in July 2017, and changed into a higher gear in August 2017. The third quarter, according to Malhotra, will cheer up the CV industry and the various stakeholders.
Acquiring Cavendish Industries Limited (CIL), Haridwar, last year, JK Tyre and Industries is looking at the multi-thronged strategy to pay rich dividends. With the acquisition leading to an operational turnaround, including the boosting of volumes amid fluctuating cost of raw materials and the dumping of Chinese tyres, Malhotra is of the opinion that the multi-pronged strategy will not only enhance the company’s ability to cater to various vehicle segments, but also help to consolidate the overall market share. Averred Malhotra, “We have achieved a growth of 35 per cent in the replacement market for CV tyres. We hope that this will improve further by the year end.”
The surge in the prices of natural rubber and petro-based raw materials over the last one year has exerted pressure on operating margins. To improve quality and increase production, tyre manufacturers are looking at working closely with the Rubber Board. To safeguard customer interest in the wake of rising material costs, Malhotra mentioned that his company has decided to absorb higher material costs. It may impact the margins for some time, the plan is to accelerate product development across categories and improve operational efficiency. “We will continue to invest on innovation, services and technology. This will help us to graduate from a tyre manufacturer to a 360-degree service provider,” said Malhotra.
Apart from a surge in the prices of natural rubber and petro-based raw materials, JK Tyre and Industries is also tackling the challenge of Chinese tyres being dumped in India. With almost 80 per cent of the imports at concessional duties, the low grade Chinese TBRs have been plaguing the Indian tyre industry for long. Calling for anti-dumping duty on such TBRs, Malhotra stated the company is riding on a comprehensive range of new and existing products, and with state of the art services under a network of truck wheel centres. It is hoping that the issue of Chinese TBRs will be soon sorted out. Expressed Malhotra that the Directorate General of Anti-dumping and Allied Duties (DGAD) has recommended the imposition of a definitive anti-dumping duty. An investigative arm of Union Ministry of Commerce and Industry, the DGAD is known to have issued a notification on August 07, 2017, that India may impose an anti-dumping duty of USD 452.33 per tonne on a particular variety of Chinese pneumatic radial tyres. “Chinese tyres continue to be a threat for heavy investments made by domestic tyre manufacturers like us. We are hopeful this will get resolved soon. The government has already taken steps towards addressing the issue,”he said.
Confident of GST encouraging seamless interstate movement of goods and simplifying the supply chain, Malhotra averred that the new tax regime will
curb under invoicing and other unfair trade practices. “Replacement of Octroi with a uniform tax structure under GST will lead to smoother movement of vehicles and reduce the delivery times,” he remarked. Expected to benefit from a rise in inter-state movement of vehicles, the tyre industry, according to Malhotra, should seek higher supply chain efficiency. Opining that the CV tyre trade withstood the effects of demonetisation to a certain extent because it largely operates on credit, Malhotra said that he expects faster recovery in the current quarter.
With stress on product diversification, JK Tyre and Industries is expanding its service network. A strong network of tyre care centers equipped with state-of-the-art technology has been developed by the company over the last few years to not only to serve existing customers but also cater to new customers. Aiming at doubling its existing network of ‘Truck Wheels’, the company is offering end-to-end solutions to tackle the fall of CV tyre sales. The solutions include fleet management programs across product life cycle to control costs per kilometer. Said Malhotra, “Our network of JK Retread Centres, JK Tyre Steel Wheels, Truck Radial Tyre Care Centres and Truck Radial total solution showrooms provide effective after-sales services to our customers.” The tyre maker has 143 sales outlets, 4000 dealers and 230 retail stores across India.
Pioneer in radial tyre technology in India, JK Tyre and Industries clocked a sale of 10 million TBRs last year. The company is now aiming to consolidate its market share in the CV segment, and foray into other segments to increase its reach. With the government’s thrust on road infrastructure development, Malhotra is of the opinion that the tyre industry in India will have a good time. “The Indian economy is riding on stable inflation, and is predicted to grow in the range of up to eight per cent. This will encourage the creation of a unified market, which would result in a major economic stimulus,” he expressed. Stating that their plants are working to capacity, and everything has been well planned, Malhotra called upon the need to ensure that the plans they have chalked out are successfully implemented.