Q & A
Vivek Kamra,
President, JK Tyre & Industries Ltd.
Interview by: Deepanshu Taumar
Q. How do you look at the industry growth? Commercial vehicle growth especially?
A. Commercial vehicles will continue to grow as new norms are coming into play next year. It will lead to pre-buying. Seeing the budget announcement on infrastructure, it is clear that a hike in the activity of transporting sand and cement for infrastructure development will act as a growth catalyst. Mining is the other sector whose growth is long overdue. A lot of policy issues have been dealt with; have been settled. The mining sector is also driven by the overall demand for coal and iron-ore. So, to that extent, mining has been largely subdued. In the last quarter however, we have seen some movement in resource prices. Let us see of it goes up. If it does, it will provide a big boost to the commercial vehicle industry and positively influence tyre consumption.
Q. What products for the commercial vehicle industry do you offer?
A. Our best performing tyres are the JDE. We have also introduced tyres like JUH 5, which is a ribbed tyre for the front axle. We are receiving good response. We are also working on tubeless tyres for commercial vehicles. These tyres will be made available in the coming years. We have different programs for all segments, and we will come up with many tyres with different features.
Q. Looking at commercial vehicle growth, how do you expect the OE and aftermarket to evolve?
A. Imports continue to be a challenge. The market is moving towards radial tyres in the case of commercial vehicles. As far as JK Tyre is concerned, we are banking on best-in-class manufacturing. Our Chennai plant is a best-in-class manufacturing facility. We are taking over the Kesoram tyre facility from Birla in Haridwar. The acquisition is at the final stage. At Kesoram, we would be manufacturing 60,000 tyres per month. Our current capacity stands at 200,000 per month.
Q. Is the expansion of your Chennai plant over?
A. Yes, the expansion of the Chennai plant is over. We can make 3300 Truck & Bus Radial (TBR) tyres per day for commercial vehicles. For passenger vehicles we can produce 12,000 tyres per day.
Q. Supplier to many vehicle platforms in India, how does JK Tyre find working with vehicle manufacturers?
A. We do new product development for passenger car radial tyres mainly, and have designed tyres to match the need of the car. Having designed at least three tyres for Maruti platforms to match the way the car runs, things are different when it comes to commercial vehicles. We are the leaders, and manufacture a tyre on the basis of the market requirement. We give it to the OEM, and customise it marginally based on the demand from OEMs.
Q. How does JK Tyres’ involvement in motorsport help with the development of tyres?
A. When we innovate a product we learn from it. We use this learning for future product development. Our knowledge for tyres increases. Consider the tyres used in Tata Prima T1 racing trucks, and they are specifically manufactured for the truck race. They are lighter and cannot withstand heavy load. On the contrary, the tyres we manufacture for the trucks are heavy; have a heavy tread thicknesses. They have to withstand high load and tackle different road conditions. The tyre used in a race are different as they are subjected to standard load conditions at high speeds; are subjected to high turning forces and therefore need to have high strength on edges. While negotiating sharp bends a tyre has to cushion the impact and not lose its shape. When our engineers check the tyres after the race, there’s so much they can learn from. They add new compounds. Do so many new things. The learning in tremendous.
Q. Have the tyres for the Prima T1 race truck changed for Season 3?
A. Over the last three seasons, the Prima T1 racing trucks have improved a lot. To match the change in performance, the tyre has also undergone changes. Through the three seasons we have enabled the tyre to support speeds of up to 160 kmph. At the rear we have changed the tyre marginally. We are using two different set of tyres – one for the front and another for the rear. The front tyres enable manoeuvrability, handling and quick response. The rear tyres provide grip. The front tyres are used to manage the vehicle whereas the rear tyres keep the vehicle firmly on the road. Running on a hot surface, the tyres have to withstand the heat as well as the rigorousness of the track. The tyres have evolved, and one needs to understand that there are driver expectations. The body weight has reduced and the tyre weight has gone down too. To enable the truck body to be lowered substantially, we have changed the aspect ratio of the tyre from 80 to 70. The change in the aspect ratio enables better handling on the track. We have used a different compound for the rear tyre which enables it to exert better road grip.
Q. You spoke about compounds. What factors influence the design and development of a tyre?
A. There are certain factors that go into the designing of a tyre. One is a need for the tyre to remain cool. It has to have a low rolling resistance and less friction to be able to support higher speeds. It should also have maximum grip to keep the vehicle from leaving the track. A tyre designer plays with three factors essentially – wet condition, rolling resistance and cooling. When you make tyres which have lower rolling resistance the mileage goes up. All the designers play with these factors. On the race track one or two seconds make a difference. If you give a tyre, which gives you a three seconds lead, the race driver would want to use it.
Q. What is JK Tyre’s R&D facility like?
A. We have three R&D units in Faridabad, Chennai and Udaipur each. The Udaipur unit is in Kankrolli, and called the Hari Shankar Elastomer Institute. We are also coming up with a R&D facility at Mysore with an investment of Rs. 40 crore. It is expected to be commissioned in May 2016. Exporting around 10-15 per cent of the total tyres produced, our Tornel plant in Mexico, which we acquired in 2008, has its own development centre. We do product development in India and align the tyres to their market needs. Our technology and R&D run from here. We supply to all the major markets as of now. Our main focus is on markets like the United states, South America, South-East Asia and Australia. In Europe we are very small. We would however want to focus on US first and then Europe. We would like to focus on the aftermarket in these regions. We are already supplying to some OEMs in US from the Tornel facility.
Q. Your outlook on Chinese tyres?
A. Nearly 40 per cent of the replacement tyre market has been taken over by Chinese tyres. We are not against Chinese tyres, what we are of the opinion is that there has to be some sensibility about the price at which you can produce a tyre. Good tyres do not come cheap. While there are some opportunistic companies which will last for two or three years and fall off, good tyre manufacturing companies will stay. In the US, if the import market share increases by 2 per cent one can file for import restrictions. Chinese tyres market share in India grew by 25 per cent in 2015-16. It has now grown to 40 per cent. The feeling is that the tyre manufacturers are not losing money. It may not be right to look at the issue only after the manufacturers start losing money. Authorities cannot peep into the accounts of manufacturers to see who is making profit. Companies make profit for the value they provide to their customers. They should be however concerned about fair play of business. The response one gets is not right; is not well thought out. There will be some policy restriction on Chinese tyres, and I am convinced that it may take up to six months or more. The prices at which Chinese tyres are being sold are just not real.
Q. As a leading manufacturer of tyres in India, how would you define growth at JK Tyres?
A. We will continue to grow across all segments. In the commercial vehicle segment we will grow substantially in the coming year. Last year we grew faster than the industry average. The revenue numbers may show that we have grown less than 5 per cent. The number of tyres sold will however show that we have grown more than the industry. On the exports front, except OTR tyres, the export of tyres dropped. Any drop in performance in the domestic market was due to a sharp price cut and the emergence of Chinese tyre competition. Growth has been firmly lead by passenger cars and truck tyres. We have grown substantially in both the segments. Our growth in segments like M&HCVs have been more than 25-27 per cent, which is the industry growth in new vehicles. In replacement tyres, it has been a flat year because of the influx of Chinese tyres. Bias tyres growth is dropping. Confident of sustaining growth in the coming years, we are ambitious and have been chalking out expansion plans for all our plants. We are planning further expansion with more capacities at Vikrant, Mysore, for all steel radial tyres. Investments will keep flowing in the coming year.
Q. Will the replacement market post good growth in the next one year?
A. I expect radial tyres to grow. Especially in commercial vehicles. Bias ply tyres growth will dip. A conversion is underway, slowly and steadily.
Q. How strong is your dealer network?
A. We have around 400 dealers. Next year we will be expanding our dealer network to 5000 numbers. We have 25 truck wheels. We have 150 steel wheels for cars. The number of truck wheels will go up to 40 and that of the steel wheels will go up to 300 by next year.
I expect radial tyres to grow. Especially in commercial vehicles. Bias ply tyres growth will dip. A conversion is underway, slowly and steadily.
