Indian Tyre Market
Tyre dealers across India are urging the government to lower the import duty on tyres to five per cent from the existing 20 per cent. The request aims to “checkmate the activities of the domestic tyre majors,” reports Team India.
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Manufacturers Take On the Russian Market
International News, NewsIf the 8th Moscow Tires & Rubber show is anything to go by, the Russian tyre market looks set to continue its development as a growth market. While the show was marked by growing interest from exhibitors and visitors, the market itself has produced some generally optimistic data and has seen perceptions of the manufacturers’ market approaches improve. All this suggests that the Russian market will continue to develop into a very interesting tyre market, with a strong growth potential.
Bridgestone UK Appoints New Marketing Director
Product NewsBridgestone UK has appointed Junichi Kumano as marketing director at Bridgestone UK. Mr Kumano has worked for Bridgestone since 1988 in countries including Singapore, India, Vietnam, and his home nation of Japan in various sales and marketing roles. His most recent position was manager of export sales at Bridgestone Japan. His new post is his first outside of Asia.
“I am honoured to have joined Bridgestone UK as it has always been an ambition of mine to work in Europe,” said Mr Kumano. “I am looking forward to working with each member of the marketing department to ensure we achieve the company’s objective of ‘steady, profitable growth’ while continuing to meet our customers’ needs.” Mr Kumano replaces Chikuma Otsuki, who is now director of sales and marketing for commercial products at Bridgestone Europe.
Indian Tyre Stocks Ride on Budget Hopes
Product NewsIndian tyre stocks are riding high in expectance of a reduction in replacement tyre excise duty in the country’s forthcoming budget. According to sources quoted in India’s Business Standard, the expectance of a 24 per cent to 16 per cent reduction has led to renewed interest from institutional investors.
Yesterday Ceat shares rose 6.71 per cent to 75.50 rupees, Goodyear India stock went up 3.89 per cent to 70.85 rupees, MRF up 3.61 per cent to 2,733.05 rupees and JK Tyres up 15.41 per cent to close at 86.90 rupees, the magazine reports. The recent share price increase, however, is set against a background of increased raw material costs.
‘Money not a Consideration’ for JK Tyre
International News, Product NewsIndian manufacturer JK Tyre was reportedly one of three large companies that forked out nearly £16 million in sponsorship in order to see the Jordan F1 team hire Narain Karthikeyan. In fact, “money was really not a consideration” when it comes to F1 sponsorship, the company told the AFP news agency.
Michelin:Apollo Venture to be Operational In 2006
Product NewsThe $100 million joint venture tyre between India’s Apollo Tyres and Groupe Michelin will begin in early 2006, according to the operation’s chairman and managing director. Onkar Kanwar said construction work on the radial medium truck and bus tyre plant, in Pune, India, has started and should be operational in the first quarter of next year, Tire Review reported, citing wire reports.
Apollo Tyres Maintains Prices
Product NewsDespite the challenges presented by raw material price inflation, Apollo Tyres has no intention to increase its own prices during the current quarter, India’s Hindu Business Line has reported. “I am not looking at this quarter for price increase. There are too many things happening in the market (budget, VAT etc) that have to be factored in before taking any decision,” Neeraj Kanwar, chief operating officer (COO), told the publication.
Indian Tyre Industry Seeks Radial Duty Reduction
Product NewsThe All India Tyre Dealers’ Federation has urged the Indian finance ministry to rationalise excise duty on automotive tyres, supporting the introduction of radial tyres. In its pre-budget memorandum, the federation requested the government to fix excise duty on radial tyres at the rate of 16 per cent on heavy vehicles and at 8 per cent for tractors to boost the sales of radial tyres. The federation has also been pressuring the authorities to lower import duty on tyres.
Bridgestone Makes Tsunami Donation
Product NewsBridgestone is to donate 100 million yen (roughly £500,000) to disaster relief aid intended for victims of the recent Indian Ocean Tsunami. The money will be distributed through the Japan Red Cross which will allocate funds at its discretion. The company’s subsidiaries in Thailand, India, Indonesia and Malaysia will make separate contributions to local relief efforts.
Continental and Michelin have also donated to the cause.
Market Prepares for Breakthrough
Product NewsThere has been much talk about the Chinese tyre market in recent months. Now, following the news of Amtel’s takeover of Vredestein, and the collapse of one of Continental’s joint ventures, the Russian market has been a hot topic. But what about India?
The Indian market may not be as large as Russia’s, but it certainly offers many challenges and opportunities to the companies working within it.
One such opportunity is radialisation. Currently radial products only make up a very small percentage of the Indian truck tyre segment, around two per cent. And, according to those involved, there is a large backlog in demand.
For instance, just recently Michelin entered into a joint venture with Apollo Tyres in order to produce radial truck and bus tyres destined for the domestic market. Pirelli and its partner, Ceat Ltd is also looking to fill the same gap in the market. No doubt other Indian manufacturers will follow suit in the future.
Another example, and in this case a big technological challenge, is the production of radial passenger car tyres. Even so, this sector is way ahead of the truck market with 85 per cent of the segment occupied by radial tyres. According to industry association ATMA this figure is likely to peak at 97 per cent in the coming years.
But one of the biggest factors influencing the Indian tyre market is the advance of motorisation. As this process gains momentum, more and more Indians want to and can afford to own passenger cars. In the last 10 years automobile production in India has quadrupled, last year alone it increased by an impressive 36 per cent.
Within the pages of this supplement on the emerging Indian market, TYRES & ACCESSORIES will give an overview of the major factors that are influencing the market and the big players that are trying to stake a claim in a market they believe should be theirs.
Subscribers to Tyres & Accessories can download the supplement in advance of publication. Please click the more button to download the file.
Changing Landscape of the Indian Market
Product NewsIndia’s strong tyre manufacturing base dates back over five decades. With a current production level of about 55 million tyres the country’s industry is expected to grow seven to eight per cent per annum in the near future, according to market insiders. Increases in domestic demand and exports will bring about a change in the landscape of Indian manufacturers which can already be characterised as an oligopoly, with few dominating players among dozens of competitiors. In order to comprehend the changing realities of the Indian market it is important to have a close look at the companies involved and major trends. The years to come will witness many changes – however the eventual outcome is still open for change.
Continental to source more from Metro
Product NewsGerman tyre major Continental AG has decided to source as many as 30,000 two-wheeler tyres and tubes per month from Metro Tyres Ltd. (MTL). Continental has also firmed up plans to source as much as 50 per cent of tubes to be manufactured by MTL for cars, tractors and light commercial vehicles, according to Indian media sources. These tyres and tubes would be sold in Germany and Europe under the brand name Continental. Meanwhile, MTL has also entered into talks with Bajaj Automobiles, Hero Honda and Yamaha for catering to the original equipment manufacturing segment.
Amtel Expands into Europe
Product NewsFollowing the news that Amtel was in “detailed discussions” with Vredestein Banden, Amtel president, Sudhir Gupta has confirmed that his company will buy Vredestein Banden and that it is planning initial public offerings (IPO) in London and Moscow in the next two years.
According to Dr Gupta, Amtel is planning a primary listing on the London Stock Exchange followed by a secondary listing on the Russian Stock Exchange. In a conversation with far eastern business publication, Business Times, Dr Gupta explained why the IPO would take place in London and not New York. “Europeans always understand Russia better than the Americans and most of the investment in Russia is European. That’s why we think London is a better place to list.” The secondary listing is also the result of ‘encouragement’ from the authorities for successful companies to list on the Russian Stock Exchange, and because “the stock exchange has good liquidity because of high oil prices.”
The listings are due to take place in one of two time frames; either October to November 2005 or April to May the year after, the Amtel president said. Currently, Dr Gupta owns about 85 per cent of Amtel. An international investment fund managed by Templeton Asset Management Ltd, owns 5.65 per cent, while 10 per cent of Amtel’s shares were recently sold in a private placement for $34.2 million. These shares were bought by about 22 institutional investors in Europe, the US and Russia.
It is clear that a key part of Amtel’s expansion plans will involve venturing outside of Russian borders. One part of this is the company’s purchase of Vredestein Banden. By purchasing the Dutch company, Amtel appears to have been aiming to buy a ready-made foothold in the market. At the moment Vredestein sells 40 per cent its tyres in Europe’s biggest market (Germany) and has well organised distribution operations across Europe.
Ceat launches all steel truck radials
Product NewsCeat has entered the Indian all-steel truck radial market, with products designed and manufactured for the Indian market by Pirelli, Europe. In the 2004/2005 financial year, the company projects a sales turnover in the region of 19.05 billion rupees (approximately £220 million). Ceat says it is eager to tap into the growing truck radial market hoping that eventually 10-15 per cent of its business will come from steel radials.
Currently the use of truck steel radials in India is about two per cent, the is considerably less than neighbouring Pakistan (35 per cent) and a world apart from Europe (90 per cent). The proportion of steel readial in the Indian truck tyre market is projected to touch 10 per cent by 2007, Ceat’s vice-president, sales and marketing, Kalyan K Paul, said.
According to the company, the use of its truck radial products can increase initial mileage by over 50 per cent, achieve fuel savings off up to 10 per cent and provide better traction and braking.
Onkar S Kanwar Becomes New FICCI President
Product NewsOnkar S Kanwar has been named as president-elect of the Federation of Indian Chambers of Commerce and Industry (FICCI). Mr Kanwar, chairman and managing director of Apollo Tyres, will take over from current president YK Modi at the conclusion of the 77th annual session next month. Closely associated with leading national and international industry chambers and other business organisations, Kanwar is also past president of the International Chamber of Commerce – India (ICCI). As head of Apollo Tyres, Kanwar recently forged alliance with Michelin, the world’s number one tyre manufacturer with operations in over 170 countries.
