JK Tyre – Past, Present & Future

When JK Tyre & Industries vice-chairman and managing director Raghupati Singhania introduced truck radial tyres onto the Indian market in 1976, people questioned the sense of the decision. Yet more than three decades on JK Tyre has not only been vindicated through the widespread adoption of the technology by its competitors; today the manufacturer holds a 70 per cent market share in this segment.

Speaking with India’s Financial Express newspaper, Mr. Singhania expressed no doubt that decisions, such as that he made in the 1970s, are vital for a company’s well being. “That’s what leadership is all about. It may not be the popular view but you have to have your own understanding and judgment.” This understanding and judgement has aided JK Tyre during its occasionally bumpy journey from a small player with an annual capacity of 500,000 units 30 years ago to today’s tyre major with a presence in 75 national markets.

Currently JK Tyre is seeking a foothold in the Chinese market through a strategic partnership with a manufacturing firm. But this, explains Mr. Singhania, is not an entirely straightforward task. “Most of these companies are owned by provincial governments.” JK Tyre has been outsourcing from China for the last three and a half years, through tie-ups with a handful of companies. And as tyres exported from India cannot compete in terms of price with those from China, the company is looking at reducing exports from India in favour of China-sourced tyres.

But Singhania believes there is more to China than just low cost production. “The Chinese are quite disciplined and have certainly been able to safeguard their industry and economy better,” he told the Financial Express. “We (India), as a nation, have become highly undisciplined.” Mr. Singhania adds that “the cost of production in China is much lower and infrastructure is outstanding. The Chinese have regulated the import regime to suit their needs and have supported industry.”

The cost of production compared with that in China is the greatest challenge tyre manufacturers in India face, and JK Tyre is countering this apparent handicap through designing and introducing products that keep costs to a minimum. The tyremaker thus offers to strata of products – regular and low-cost. Even though the low-cost products still carry a higher price tag than tyres from China, Singhania says they sell as customers have confidence in their quality.

At present overall capacity at JK Tyre is upwardly mobile, with a total of Rs 11.8 billion (£153 million) earmarked to achieve this over a three-year timeframe. Approximately Rs 3.2 billion (£41.4 million) will be directed, says Singhania, at increasing truck radial capacity – currently 367,000 units – to 800,000 tyres per year. Efforts will also be focused upon increasing activity in international markets, and Southeast Asia and China are said to be on top of JK Tyre’s list of priorities.