The Hindu Business Line : Yokohama India looking at niche tyre market

Chennai, Dec. 1 Yokohama India Pvt Ltd, a wholly owned subsidiary of the Japanese Yokohama Tire Corporation, which is the seventh largest tyre manufacturer in the world, believes it is fast occupying a growing niche in the Indian tyre market. This is the market where customers are prepared to pay a premium for quality and look at long-term advantages over immediate cash spend.

Yokohama came into India in the summer of last year. Today, it sells around 10,000 passenger vehicles tyres a month, all into the replacement market.

The company would need to ramp up sales to something like 2,000 tyres a day for it to begin making the tyres in India, according to Mr Tatsuo Nishimoto, Managing Director, Yokohama India.

High import duty

The company is in a catch-22 situation.

Mr Nishimoto says that car manufacturers in India (especially the Japanese ones) love Yokohama’s tyres but cannot buy them because the import duty (38 per cent) makes them prohibitively costly.

Without giving a number, Mr Sanjay Chatterjee, National Sales Manager, Yokohama India, says that the company’s tyres are 10 per cent costlier.

Part of the reason is that it has to bring in these tyres from its plant in Japan, although it has a production base in nearby Thailand and the Philippines.

Facilities in these countries, like Yokohama’s other plant in China, are fully occupied with production for local supplies.

Distribution network

Yokohama is busy ramping up its sales and distribution network. In fact, that was what that brought Mr Nishimoto to Chennai last week — he came here to inaugurate a clearing and forwarding agency, Jyoha Enterprises.

Doubling retail outlets

Mr Nishimoto told Business Line that Yokohama intends to double the retail outlets selling its tyres to 320 in two years.

The Chennai C&F, Jyoha Enterprises, is run by Mr N.C. Vijayakumar, a former dealer of TVS Motor Company (Centigo) in Chennai.

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