Companies

Steelbird aims to be among top five tyre makers by 2023

Nandana James Mumbai | Updated on August 01, 2019 Published on August 01, 2019

Automotive components manufacturer Steelbird International, which entered tyre manufacturing last year, plans to increase its retail touchpoints for tyres to 30,000 from the current 3,000 by FY21.

The company aspires to become one of the top five tyre manufacturers in the country by 2023, said Manav Kapur, Executive Director, Steelbird International. It also plans to augment its exports, with an aim to garner around one-third of its revenue from that segment in three or four years, up from the current 10 per cent.

Steelbird began manufacturing tyres for two-wheelers and electric three-wheelers last November. It also exports rubber components and filters.

Auto slowdown

The company’s auto parts segment is facing the heat of the slowdown in the automobile sector, but its presence in other markets — such as after-sales and exports — have diluted the impact, Kapur told BusinessLine.

Steelbird saw a 25 per cent year-on-year dip in its auto parts segment in the first quarter of this fiscal, but has garnered an overall double-digit growth owing to its exports and after-sales segments, said Kapur. The company’s strategy of focussing on diverse markets has helped it remain less impacted at a time like this when the industry is reeling under the impact of a slowdown, he said. It is currently growing at a CAGR of 22.7 per cent.

Over the next two years, Steelbird expects its tyres to be available pan India, and is eyeing big numbers in distribution, as opposed to a focus on sales, said Kapur. It exports to Latin American countries, Germany, Japan, Sri Lanka and Bangladesh, among other countries. With trade tensions on the rise in China, Indian manufacturers are receiving a positive feedback, he added.

Electric vehicle needs

Talking about the government’s plan to mandate electric three-wheelers and two-wheelers by 2023 and 2025 respectively, Kapur said that for the tyre manufacturing segment of the company, there would be a marginal change in product specifications, and that the infrastructure required to manufacture tyres would largely remain the same.

But the auto components industry is likely to face setbacks as an electric vehicle (EV) does not require too many components. Kapur said the number of moving parts needed in an EV is 20, whereas in an internal combustion engine vehicle, it is 2,000. The after-sales market is also set to be affected as EVs will not be needing mechanics, he added.

“Going forward, the big question for all companies is — do we need to continue the growth in the non-EV space the way we are going today and end up with something which is not allowed in three years,” said Kapur. He pointed out that currently, 99 per cent of the market is non-electric and to sustain this market, continued investments are needed, be it for the transition to BS-VI norms or for capacity additions. How to address this focus on EVs with a minimum damage to the existing businesses is a question that remains, he said. He also said there is need for better clarity on whether this recommendation by NITI Aayog is a mandate or not.

Published on August 01, 2019
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