The Hindu Business Line : CEAT to exploit 3-wheeler segment

CEAT Ltd, the automobile tyre manufacturer of the RPG group, plans to exploit the growth in three-wheeler vehicles to increase its presence in this segment.

According to Rajiv Kumar Jain, General Manager - Marketing, CEAT caters to the original equipment manufacturers and the after-market. India is among the largest manufacturers of three-wheeled vehicles — over 4-lakh vehicles are manufactured every year — and the production has been increasing by about 20 per cent a year in the last three years.

Good demand

The demand is in the cargo carriers and passenger transport segment. Three-wheelers are seen as the `last mile vehicle' that carries goods within the cities and towns. Also, they are a popular form of public transport.

This means that the tyre usage pattern is changing. Due to traffic restrictions in urban centres three-wheelers have emerged the preferred mode of goods transportation. Over 60 per cent of the three-wheelers are cargo carriers and the rest passenger vehicles. Expanding cities means that people need to travel more and for commuting up to 25 km, these vehicles are becoming indispensable.

This means the requirement for tyres in this segment is booming. The southern States are the major markets as they account for about 60 per cent of the three-wheeler population, Mr Jain said.

Targeting mechanics

CEAT has launched tyres specifically for this segment. The company is targeting the mechanics — they are important consultants and advisors for the vehicle owners and drivers. Because of the heavy usage, the after-market is a major consumer. The monthly demand for these tyres in the passenger segment is estimated at 1.5 lakh and in the cargo carriers about 1.25 lakh.

The company has a 5 per cent market share in this segment. It is pushing to double this market share in the coming year. At least 50 per cent of the market is with the unorganised sector, the local manufacturers. There are few players in the organised sector and quality will tell, Mr Jain said.

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