Tyres for CVs

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Q & A

Arun Kumar Bajoria,

Director & President – International Operations, JK Tyre & Industries

Interview by: Anirudh Raheja

Q. Part of Tata Motor’s Prima T1 racing initiative from the start, how would you term your association with the CV major?

A. JK Tyre has been manufacturing tyres for four decades. That is a fairly long duration. We have 12 manufacturing plants, out of which nine are in India, and three are in Mexico. We have a work force of 15,000 tyre specialists in various disciplines, starting from tyre engineering, tyre designing, prototyping, manufacturing to testing. We have built a good brand value, and Truck and Bus Radial (TBR) is a segment where we are market leaders for the last two decades. We pioneered radialisation with steel belted radials in the country. We achieved the distinction of manufacturing 10 million TBR tyres recently. Having invested significantly in terms of product development to produce the right tyres for the right application, our association with Tata Motors starts at this stage. Being involved in motorsports activities for long, and being a market leader, we have the right technology to develop high performance tyres. Tyres that were never ever built in India, we were able to build. We delivered the first set of racing tyres to Tata Motors in just 50 days. Season-after-season, we have been working with Tata Motors to enhance the tyres in terms of the changing requirements and parameters. Our tyres have already been tested for speeds of over 160 kmph. Our ambition has always been to engineer the product to perform at least 20 per cent higher than the expectation.

Q. How have the tyres evolved in the process?

A. There are three things. Firstly the size is different, which is 315/70 R22.5 designed for speeds up to 160 kmph. This is against prevailing average size of tyres, which is 295/80 R22.5, and whose average speed is 140 kmph. We have changed the compounds to suit the racing style; to suit higher speeds, cornering and braking. The pressure that the tyre shoulders undergo during racing, is where tyre design plays a vital role. The tyres are thus designed to offer better grip, cornering abilities and traction. Especially when one considers the fact that the forces acting on tyres quadruple when cornering at speed. The tyre needs to withstand much pressure to perform.

Q. How do you see the new, 1000bhp Tata racing Prima from a JK Tyre point of view?

A. For us, it signals a move to higher levels of speed. To us, it means more work. It is more for testing as of now. With nearly two and a half times the power than what the current racing Prima has, the 1000 hp racing Prima shows Tata Motors’ technical prowess. In other countries, racing trucks are powered by 750 hp to 800 hp engines.

Q. How does motorsports align with the company philosophy?

A. Simply put, motorsports is our vehicle to build the brand. We started with small vehicles like Go-karts. We have had racing champions like Karun Chandhok and Narain Karthikeyan. Motorsports has been the test bed for our tyres. We have been testing our own tyres with our home grown drivers. We have reached a level where we can develop capable and safe tyres that perform at their best, and in the toughest conditions. The hardwork of the team at JK Tyre has helped to build the brand.

Q. What is your opinion about CV radialisation?

A. Radialisation in the TBR segment has crossed 40 per cent. A decade ago, it did not even amount to single digit figures. The pace of radialisation is fast. This is because of two associated advantages – high initial tread mileage and fuel saving. As compared to bias ply tyres that can clock between 70,000 and 80,000 km, a radial tyre can do 1.2 lakh km. If cared for, and not subject to overload, radial tyres in CVs can go up to 1.4 lakh km too. TBRs offer better mileage of up to 10 per cent.

Q. How are you educating truckers about the TBR advantage?

A. We carry out measures to educate truckers about the advantage of using TBRs. The initial investment is high, that of 22 per cent almost over a bias-ply tyre. The ability to deliver higher mileage however offers significant pay back. If you take Cost Per Km (CPKm), the initial investment is recovered in a very reasonable time. As for the measures we carry out; we hold camps and activities. We train drivers, and hope to continue doing it in a structured manner.

Q. What do you think is the reason for fall in production of tyres by 20 per cent in the last one year?

A. One of the main reasons are the headwinds caused by demonetisation. Things slowed down for a few months. I am hoping things to start improving in the first quarter of FY2017-18. Tyre production at JK Tyre has not fallen. It may remain flat.

Q. Demonetisation affected Chinese tyres influx. Has that helped the Indian tyre industry?

A. As we see it, those tyres were coming in through ‘Hawala’ transactions, and were subject to a lot of malpractices and malafied intentions. Tyres were often priced below the actual raw material prices. No guarantee was offered. Taxes were evaded. From a figure of almost 50,000 tyres per month, the sale of Chinese tyres has gone down by 50 per cent almost. Though there has been a bounce back, I think that the tyre industry will soon enjoy better times.

Q. How do you look at dumping of tyres in India?

A. It took just 90 days in the United States to impose anti-dumping duties on OTR tyres from India. We have been requesting the Government for long to impose anti-dumping duties on Chinese tyres. The Chinese have been dumping tyres at un-remunerative prices. There is too much under-hand and over-hand invoicing. Apart from compromising safety, the tyres signal a revenue loss to the Government due to tax evasion. The service standards offered are not on par with organised players. Buyers are taken for a ride because they get tyres at a much lesser cost.

Q. CVs are modernising. How would that affect the tyre industry?

A. Tyre manufacturers are working on tyre monitoring devices that are fitted to wheels. We are already testing a TPMS product and technology. We feel that it is going to be an important element. The TPMS that we are working on, will give deflection figures of tyres on the dashboard. Also, when the Initial Tread Depth (ITD) changes. In high performance cars, if the tyre pressure goes down, the same gets reflected on the dashboard. In India, which is a very price sensitive market, such technologies are not cheap as of now. They will not be until they are produced in bulk. One TPMS unit in one tyre will cost Rs.280 approximately. What makes TPMS important is because of its ability to influence fuel efficiency. If the tyre is monitored well, which the TPMS helps to do, fuel efficiency increases. In the long run, tyres will have electronic components that will benefit the end user.

Q. Has JK Tyre associated with a TPMS manufacturer? There have been aftermarket offerings.

A. There is no OEM offering in this segment. We are developing it (TPMS) on our own. We have specialists from different spheres, and they visit international exhibitions to understand the latest trends. We are in discussions with two largest manufacturers involved in TPMS. As you may be aware, these are constantly developing procedures, and one needs to keep looking for devices which will be beneficial to increase tyre life.

Q. Automation and operating speeds are rising. Amid this, how do you look at CV tyres to perform?

A. Trucks will continue to change and modernise. BSIV emission norms are here. This will lead to an escalation in price by up to Rupees-two lakh. People will have to appreciate it. The government is pushing for second legislation that will say no to overloading. This is linked to the government’s push to build infrastructure and roads. Roads that are expected to last for a decade will be consumed in two years due to overloading. The regulations will need to be implemented and executed. Consider the case of air-conditioned truck cabin. He (the driver) must have a comfortable cabin. Manufacturers are already developing modern cabins, but price is a constraint. Such developments will continue to evolve. They will put an additional demand on tyres. Tyres will need to be upgraded constantly, both in terms of life and economy.

Q. Rubber prices continue to fluctuate, and pose procurement challenges. How do you look at it?

A. It is a big challenge. We used to buy rubber at an average price of Rs.110 per kg. We now buy at Rs.160 per kg. The demand of rubber in India is almost 10.5 lakh tonnes. Production of rubber in India is not more than 6.5 lakh tonnes. To meet the 10.5 lakh tonnes demand, considerable amount of rubber is imported. Imported rubber is expensive than the rubber procured in India. What makes it sensitive is the fact that we have been requesting the government to work on an inverted duty structure. To import rubber in India, one has to pay as per the tax rate of 20 per cent. The import duty, at the other end, on a finished tyre is nine per cent. This is weird. For the promotion of ‘make in India’, there is a need to protect the local industry from headwinds.

Q. What effect does this have on the production of tyres?

A. Those who are aggressive are not letting the production suffer. One can opt for different avenues like exporting and inventing better tyres. All that energy is however saved and utilised for other, better and more productive activities if a level playing field is available. The USA, which is considered to be a champion of free economy, has imposed 37 per cent duty. It is clear, that everyone tries to protect their own economy.

Q. What effect do you expect GST to have on the tyre industry?

A. I am optimistic about the implementation of GST. Many wrong practices will come to an end. There are various complications due to competition between states that have interstate malpractices today. All that will be regulated to a great extent. I think, it will boost sales.