“The company will address the challenges posed by the shift to electric and other vehicles. To cater to the EV market, technologies are being developed, and progress has been made,” KM Mammen, Chairman and Managing Director of the company, said while responding to the queries of the shareholders during the 62nd annual general meeting of the company.
He said MRF’s EV tyres would come with ultra-low rolling resistance, good traction, wear resistance, and noise suppression, among others. With these properties in EV tyres, the company is confident of gaining a good foothold in the EV market.
Investments in R&D
Mammen also said the company was making investments in R&D in addition to joint R&D activities. “On average, the company spends about ₹100 crore on R&D activities every year, apart from capital expenditure. Further, the company undertakes R&D projects in partnership with research institutions and universities in India and abroad,” he added.
The R&D initiatives are directed towards developing new products, alternative raw materials, and making our products environmentally friendly.
Indian tyre companies have been focusing on R&D for developing a new range of tyres for electric vehicles, as battery-powered vehicles would require a different set of properties, including lower rolling resistance.
The R&D expenditure of the tyre industry is forecast to more than double to $151 million from $64 million after growing threefold in the past five fiscal years, according to a report by Crisil.
While major obstacles to EV adoption include cost, uncertainty over range, and battery safety issues, buyers’ interest in EVs is rising. Amid challenges, the electric vehicle market is expected to experience continuous growth as sales of EVs are projected to grow by 25 per cent in this calendar year, representing a bright spot in an otherwise challenging market.
MRF, TVS Srichakra, and Ceat are the leading two-wheeler tyre makers in the country. Both TVS Srichakra and Ceat have already come out with a range of tyres for electric two-wheelers, and TVS Srichakra has the highest number of E2W OEM approvals. MRF has also developed a tubeless tyre for electric scooters.
On capacity utilisation, Mammen said the company had headroom for further growth.
The ₹23,261 crore (consolidated revenue) company garners about 92 per cent of its revenue from the replacement market, OEM supplies, and institutional sales, with the replacement segment accounting for a significant share. The remaining 8 per cent comes from exports.