Bridgestone is betting big on India for tyres

Naoto Yamagishi is excited about his company’s growth opportunities in India. As Managing Director of Bridgestone Asia Pacific Technical Centre headquartered in Thailand, he believes that a lot of the action is happening in the automotive arena here. After all, India is projected to produce over five million cars by 2020 which will make it the third largest market after China and the US.

These numbers augur well for Bridgestone which is keen on growing its tyre business here from its plants in Madhya Pradesh and Maharashtra. Yet, Yamagishi only smiles when asked if a technical centre will come up here to keep pace with the growth plans. Thailand still holds the aces in Asia-Pacific while China, Japan, Italy and the US make up the list of other centres.

“India will do more R&D work in the future. We are expanding our business and need to step this up,” says Yamagishi. His India counterpart, Kazuhiko Mimura , is equally upbeat about the road ahead. “From our top management’s point of view, India is one of the most important markets,” he says.

Going forward, it will become even more relevant for Bridgestone’s global targets and vision in the coming years. India is comfortably ahead of the rest in Asia-Pacific where the likes of Indonesia, Thailand, Taiwan, Malaysia and the Philippines report lower car sales since they are smaller markets. In addition, India is the world’s largest two-wheeler market, a segment Bridgestone recently made a foray into.

It was also some weeks ago when the company launched Firestone, which Mimura terms “a legendary and great brand of Bridgestone” with its roots in the US. “We are proud to launch it in India as it will cater to a wider variety of customers seeking value for money,” he says. With its wide mix of vehicles on the road right from two-wheelers to cars and trucks, India’s complexities also translate into a lot of opportunities.

“It takes time to develop tyres for a variety of customers. We launched Firestone as part of this strategy. Other markets are growing too but India is faster and, therefore, more relevant to Bridgestone right now,” says Mimura.

He is quick to add that it is important to prioritise business opportunities and check out carefully if the company needs to enter particular segments. “Whenever we see something interesting, we need to decide the next step based on market surveys before finalising where to go,” says Mimura.

Despite India’s obvious market potential, some multinational carmakers especially from the West believe it is not easy doing business here since it is highly price-conscious which translates into lower margins. “Challenges throw up opportunities. We simply do not bring products from other markets to India but carry out extensive research and market surveys to get the right specifications,” says Mimura.

According to him, India is not “totally different or complex from other markets”. As he puts it, certain customer segments represent value for money in other countries as well even while this could be a little more pronounced in India and the ASEAN region. “It is important for us to make the right survey and start from the customer. We just don’t look at product,” he emphasises.

Equally, Mimura does not make a big deal out of the intense competition in the Indian tyre arena which constantly worries about dumping from countries like China. “I do not see any difference here compared to other countries. We welcome healthy competition and know that we cannot grow without it,” he reiterates.

By the end of the day, the challenge is to provide suitable products with adequate R&D and marketing support. Indian road conditions are pretty rough and “that is why our concern for tyre specifications is the strongest and toughest here”.

One of the subjects intensely debated in the auto sector is the Bharat Stage VI emissions deadline which comes into effect in 2020. While the time period and accompanying issues like technology and fuel availability are discussed in forums, the tyre industry also faces it own set of challenges.

“The tyre is the most important part of a car to reduce emissions and it is not so easy to optimise requirements like durability and longer life,” says Yamagishi. As he explains, tyres need to keep pace with changing global trends and the challenge is to create the right products.

Will this mean that tyres produced in the post-BS VI era could have reduced life periods? Perhaps they will be dearer too given that manufacturers like Bridgestone will need to invest in new technology as existing tyres may not be able to meet BS VI requirements.

According to Yamagishi, India is not alone in the battle for tighter emission norms as countries such as Malaysia and New Zealand are also working in this direction. There is a lot of work happening at its Thailand technical centre where India is perhaps key focus in the clean air drive. “We need to think of costs and it will be tough across the world,” admits Yamagishi.

Sure, there are challenges ahead but as Mimura says, Bridgestone is the global No 1 brand which has the expertise and technologies to “steer us through this change”. Twice a year, the Indian operations carry out new product plan meetings where issues on BS VI will also be discussed in detail.

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