Managers from the MRF tyre plant at Tiruvottiyur in the Indian state of Tamil Nadu met with union representatives on December 7 in an attempt to resolve the deadlock over the factory lockout that began four days earlier. Plant management announced an indefinite lockout on December 3, the result of their claim of employee indiscipline and inability to meet productivity norms. A previous meeting on December 5 failed to resolve the issue.
India’s largest tyre manufacturer, MRF, has unveiled a new high performance PCR line. Called the MRF ZSLK, the tyre features a silica reinforced compound that is said to reduce rolling resistance, thus providing economic and green benefits. MRF reports that, in addition to in-house tests conducted by the company’s R&D centre, the ZSLK series has undergone testing with the globally respected technical services firm, Germany’s TÜV.
(Akron/Tire Review) Tire Group International will soon celebrate both its 15th anniversary and the grand opening of its new Miami offices. The event will be held on December 8. TGI carries more than 40 tyre brands, the company said, including its own private labels Astro, Cosmo, Industar, Luna and Jaguar, as well as other brands such as MRF, Delta and Matador.
Apollo Tyres, whose chairman Onkar S Kanwar recently voiced the company’s ambition of doubling turnover to US$2 billion within the next three years, is reportedly in OE supply talks with both Skoda and Hyundai. Specific details of these negotiations have not as yet been made public. And while the Indian tyre major has not at this stage been selected as an OE supplier for the Tata 1 lakh (£1,250) car – JK Tyre and MRF Tyres will initially fulfill this role – it is not ruling out the possibility of coming on board at a later date.
“When Tata Motors was initially finalising the vendor base, we did speak with them,” Apollo Tyres’ chief, India Operations Satish Sharma commented to India’s Economic Times newspaper. “However we plan to follow a different model. We would initially supply tyres in the after-sales market for the Tata Rs 1 lakh car and once the volumes pick up, we might become their OE partners.”
(Akron/Tire Review – Hindustan Times) The flurry of new car launches in India is bringing in a quiet revolution: tubeless radial tyres have become standard fitment. Most of India’s tyremakers including MRF, JK Tyres and Ceat have started manufacturing tubeless radial tyres.
It is a quiet change on behalf of carmakers, says Tom Thomas, chief of manufacturing and technical for Ceat Tyres. Previously, most carmakers stuck to regulation tyres with tubes. These are cheaper, but they are also prone to punctures and excessive wear and tear. “Tubeless tyres give better long-term value for money for a buyer, and it is easy to repair too,” said a Mumbai-based sales manager for Tata Motors who declined to be named. “Tubeless radials can carry on with a nail in them for many kilometers, and you will probably notice the flat tyre at home, rather than on the road,” added Thomas.
India’s largest tyre manufacturer, MRF Ltd, has achieved a fiscal milestone and, at the same time, spoken afresh of plans to circumvent the country’s ‘inverted’ duty structure for tyres and raw materials.
The company’s chairman, K.M. Mammen, told media in Chennai on October 5 that MRF had, in the 2006-7 financial year, become a Rs 50 billion (£620.4 million) company, with turnover in the recently closed financial year up from Rs 42.6 billion (£528.6 million) during the previous year. The company added that profit is expected to be about 1.8 per cent of turnover, some Rs 900 million (£11.2 million).
Almost 20 per cent of turnover reportedly came from OEM sales. A further 10 per cent was garnered from exports and 2 per cent from sales to India’s military. The remainder came from the Indian replacement market, a £2.4 billion market of which Mr. Mammen claims MRF holds a 26 per cent share.
Former Apollo Tyres creative media provider JWT has secured the MRF Tyres account, a deal reportedly worth Rs 200,000,000 (US$5 million). The global advertising firm’s Chennai based office will handle the MRF corporate and motorcycle tyres accounts, and will promote the tyremaker through a number of mediums including television, print and internet advertising.
JWT allegedly was required to drop the Apollo Tyres account in order to be taken on by MRF.
The International Rubber Study Group (IRSG) has released a statement outlining the addition of India’s largest tyremaker, MRF, to the Group’s Panel of Associates. The Wembley based IRSG, an intergovernmental organisation providing a forum for the discussion of issues affecting the supply and demand of both natural and synthetic rubber, stated it was “pleased to have MRF as one of its members, thereby expanding the good cooperation with the Indian rubber sector, one of the major growth areas in the world.”
The IRSG Panel of Associates includes a number of global tyre majors, including Bridgestone, Goodyear, Pirelli, Yokohama and Continental. MRF, however, is the first Indian tyremaker to add its name to the list. All companies or organisations participating in the rubber industry are eligible to join the Panel of Associates, and the IRSG believes members benefit from the interaction between industry and the Group’s Secretariat.
According to India’s Economic Times, tyre companies in the subcontinent plant to invest around £670 million in their operations over the next two or three years. The financial daily reports that this sizable sum will be spent by a number of players including MRF, JK Tyre, Apollo, BKT, Ceat, Birla and Bridgestone. Birla alone is reportedly spending £120 million, while Ceat is said to be making investments worth £97 million and JK Tyre £45 million.
Such a large investment is expected to increase industry turnover from its current £2.3 billion up to £3.9 billion, and much of the increase may come from the production of TBR tyres. While radialisation in the passenger car sector has reached over 95 per cent in India, TBR market penetration remains a paltry 2 to 3 per cent.
An Indian government panel has recommended increasing the anti-dumping duty imposed on truck tyres from US$99 to $135. Originally implemented last October, the duty is intended to curb the large numbers of low-priced Chinese imports flooding into India. At present tyre imports from China are running at 68,000 units a month, a five-fold increase in the levels recorded three years ago.
The difference in price between Indian tyres and their Chinese equivalents is approximately 25 to 35 per cent despite the Chinese government’s removal of its 5 per cent tyre export subsidy and increased freight charges for exports to India. Such a gulf in prices means, according to MRF executive director of marketing Philip Eapen, that the increase in duty will make little difference apart from making Chinese imports a “little more unattractive.”
The share market value of several Indian tyre manufacturers has fallen in the wake of news that domestic vehicle makers such as Tata Motors and Ashok Leyland are reducing their OE tyre orders. Vehicle sales in India have declined in the last year, with a 15-20 per cent fall in growth recorded. Shares in MRF Ltd fell 3.22 per cent on June 6, while stock in Ceat Tyres and JK Tyres fell by 5.07 and 3.68 per cent respectively. Apollo Tyres closed 0.81 per cent lower. “There will definitely be a little downturn in tyre stocks as auto stocks are all down,” said Ms Vaishali Jajoo, an automotive analyst with brokerage firm Angel Broking.
(Akron/Tire Review) India’s MRF received the highest customer satisfaction scores in the recent JD Power & Associates Asia Pacific 2007 OE tyre survey.
The study considers new-vehicle buyer perceptions of OE tyre appearance, durability, ride quality, traction and handling.
MRF ranked highest overall, scoring 840 points out of a possible 1,000 points. It marked the fifth time MRF topped the OE study list.
JK Tyre followed in the rankings with 822 points, while Apollo garnered 812 points.
Indian tyre major MRF Ltd has chosen business solutions provider SAP to provide assistance in its efforts to enhance its global operations through the company’s ‘SAP for Automotive’ set of solutions, which includes enterprise resource planning and customer resource management software.
As a company exporting to more than 75 countries MRF needs to be prepared for fluctuations in the global supply and demand of everything from raw materials to finished products while still meeting strict shipment deadlines. Furthermore, in the increasingly competitive global tyre market, it is essential that tyremakers such as MRF be able to timely monitor and respond to competitor’s pricing and special offers. By using SAP MRF will be able to seamlessly integrate logistical and financial data, eliminating redundant work and saving time and operational costs.
Indian tyre manufacturers are expected to experience a difficult quarter in Q4 2007, the Business Standard has reported. According to the report “spot rubber prices in this quarter till date have averaged 95 rupees per kg levels as compared to an average price of 78.4 rupees per kg in same period last year.” Higher rubber prices this year are attributed to unfavourable weather conditions in key South East Asian producing countries, coupled with buoyant demand conditions from China, say analysts. As a result tyre stocks are said to have under-performed since the beginning of the quarter. Apollo Tyres is said to have 25 per cent during this period compared to a 7.6 per cent fall in the Sensex exchange. MRF also declined 24 per cent during this period.
Indian tyre major MRF has signed up popular Indian driver Gaurav Gill to compete in the FIA Asia Pacific Rally Championship (APRC) for a full season this year. Addressing a press conference to announce MRF drivers for the championship, K M Mammen, MRF’s chairman and managing director, said “this is the first time that an Indian will be vying for honours in the event by competing in six of the seven legs. Gaurav (Gill) is also the first Indian to register with the FIA for the APRC Series.”
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