The growing number of new vehicle models and variants is opening up opportunities for tyre manufacturers, according to Vikram Malhotra, Vice-President (Marketing & Sales), JK Tyre & Industries Ltd.
Whether it is the Ford Ecosport or the Honda Amaze, automobile manufacturers are seeing increasing sales in new products, and that gives an opportunity for suppliers, including tyre-makers.
OEM segment
But suppliers need to cut short development time for new products and JK Tyre is ahead of the curve with its new factory, where capacity will be increased further, he said. Both in passenger car radials and tyres for farm equipment, the original equipment manufacturer (OEM) segment is bigger than the replacement market because the product life is longer.
Production hub
Chennai will be JK Tyre’s main production hub. The present production capacity of 25 lakh radial tyres for passenger cars will be doubled shortly and that of truck and bus radials tripled to 12 lakh tonnes.
Machinery is being ordered for the Rs 1,200-crore project.
With the after-sales market getting crowded, new product development will be the key focus. Catering to OEMs that have a major focus on export markets has a ‘rub off’ effect for JK Tyre, which gets exposure to more markets.
The company is keen on expanding its exports. JK Tyre is also exploring opportunities to expand in South-East Asia.
Better second half
The second-half of the current year is expected to pick up following the good monsoon.
Typically, companies do better in the second-half than in the first.
The company has two plants in Madhya Pradesh catering to tyres for farm segment.
The output is being expanded from 14,000 tyres a month to 23,000. The new capacity will be available from March 2014, Malhotra said.