With CV industry showing signs of revival, how has been the performance of the tyre industry?

Last year has been a difficult year for the CV and the tyre industry. The reason was the sluggish economy and the slow pace of infrastructure development due to a decline in government spending. However, the ‘Make in India’ concept promoted by the government comes as a ray of hope. Also, the talks of iron ore and coal mines being reopened, which are crucial to the transport business. The build-up is good and the sentiments are turning positive. We expect these to result in a positive second half of this year (post August 2015). The successive cuts in diesel price, have seen benefits being partly passed on. There’s been some reduction in costs associated too. The trend of overloading has come down as well. The situation has improved. Maintenance costs will reduce. Combined with fleet usage, the indication is that of revival.

So, will you focus on the mining industry or the TBR industry?

JK Tyre was one of the first tyre manufacturers to introduce radial tyres in India. Radial tyres are no longer an exclusive concept. Having climbed to 32 per cent, we expect radialisation to rise to 50 per cent by 2016-17. We have been on the move continuously. After buying government owned Vikrant Tyres, we ensured that we develop technologies for the Indian market. This propelled us to become a market leader in truck radials. A customer does not simply buy a product. He buys a complete package. Our ‘Truck Wheels’ concept for example. Customers are aware of the benefits of radial tyres. That a radial tyre generates 70 to 80 per cent more mileage. They are also aware that a radial tyre increases re-treadability, and in-turn better life as well as lower cost per km. Much is also about maintaining the right pressure, rotating the tyres, aligning the wheels regularly and checking the tyre wear indicator. JK Tyre also has a presence in the retread business called JK Tread. Since the re-tread pattern is the same as that of the new tyre, it helps.

What are the technologies that JK Tyre is working on?

We have an iconic tyre called JDH, made particularly for the drive axle. Last year we increased its mileage by 10 to 15 per cent, as well as its re-treadability. Since the first preference of the customer is the life span of the tyre over initial mileage, we engineered the JDH with multiple re-treadability. While the tyres we offer can be re-threaded at least once. JDH can be re-treaded multiple times. The new JDH 3 and JUH 3+ is supplied to OEMs like Ashok Leyland, Tata Motors and Daimler India Commercial Vehicles. JK Tyre also supplies tubeless radial tyres for buses, trucks and trailers as well. We are exporting tubeless tyres to Latin America, Australia, Middle East, South East Asia and African markets and also to OEMs for original fittings in their export oriented vehicles.

What are the tyres that you are supplying to 2015 season Tata Prima T1 racing truck?

The tyres that we are providing this year for the Tata Prima T1 race truck have been further strengthened. This was done with the view of the truck doing higher top speed of 130 kmph. Last year, it was 110 kmph. It requires much technological prowess to get there. We received accolades from British truck racers last year. Truck racing is yet to come of age in India. We are receiving tremendous inquiries from abroad.
What about your TBR and Off-highway tyres roll out?

There was a perception that off-highway tyres can’t be radials as they might incur cost. We have supplied a tyre called JDC 3. This tyre typically does 30 per cent duty off-road and 70 per cent on the highway. Demand for JDC 3 has been good. Available is sizes, 10 R20 and 11 R20, the JDC 3 is in the testing phase with a few OEMs. It is already available in the replacement market. Our plant at Mysore rolls out TBR. The Chennai plant offers truck radials and passenger car radials. We are in the process of expanding the Chennai Plant. The expansion activity will be completed by May 2015.

How has JK Tyre performed over the last one year?

We will be one of the highest growth achieving companies as far as the top line is concerned. The bottom line has also been good. This is due to favourable raw material prices and efficient utilisation of our TBR capacity, which has been hovering around 100 per cent in both the plants over the entire year. Also, the combination of the two factors mentioned above helped us to bring the cost down.

How do you see markets shaping up in next two years?

In the next two years we believe that the market will bounce back. While the CV industry has been in the doldrums for the last two to three years, things are set to improve. By next year, I think the CV industry will grow in double figures. At JK Tyre, we are expanding capacities keeping in mind the increasing demand. The replacement market, I feel, will pick up first. The OE market will follow. When the time is right, we will be launching a slew of new products, which we have lined up and are currently under testing. We have expanded our dealer network by 15 per cent in the replacement market, going beyond tier 1 cities. By the end of January 2015, we will add another five ‘Truck Wheels’ centres, and in the next one year we plan to have 50 such centres.

How do you maintain a strong connect with customers?

We regularly communicate with our customers through seminars. We reward them through programs like ‘Radial Baadshah’, where we not only offer them good products but also counsel them. We also have a team of about 44 people in fleet management. They handle fleet related issues. They sit with the fleet owners to highlight costs differences achieved, as well as obtain customer feedback to better understand future tyre needs, well before the demand arises. These personnel play an important role in helping to tide over customer queries. For instance, a customer has a query about the price of a JK product, that he has paid two per cent more for a JK tyre, we show him that his costs per km can reduce by six per cent. It helps us to convince the customer. An Indian customer no longer goes for a cheap product. He is value sensitive. He will pay for a product as long as he sees a clear value proposition, which our personnel aptly explain. It is all about quality, communication and service – that is important. When Chinese tyres came into the Indian market, many purchased them in huge quantities. They soon found that these products lacked sustainability. To counter this influx, we have ensured that our range covers both ends of the spectrum. A long-haul, high-speed heavy vehicle buyer will purchase the best. A short-haul buyer will not need an expensive tyre. We have tyres that will suit the needs of either type of buyers. We have expensive, premium and less expensive products.