Ceat To Focus On Non-truck Tyre Segment  ( April '9,2003, FE)

In a bid to hedge against the cyclical nature of truck-tyre sales, RPG Group company Ceat Ltd has decided to focus on the non-truck tyre segment. The company will focus on two-wheeler and passenger car radials and is aiming to have an equal split between truck and non-truck sales in the near term.

Currently, sales are skewed 70:30 in favour of truck tyres.

Ceat has adopted a multi-pronged strategy to beef up its presence in the non-truck segment.

The company is aggressively outsourcing volumes to ensure that demand is met. Moreover, a dedicated non-truck selling team comprising around 32 people has been set up.

Ceat managing director Paras Chowdhury said, “We want to increase our focus on the growing non-truck tyre market which will not only give us good profitability, but also help in increasing the brand visibility for our products among consumers. Over the next few years, we would like this business to contribute nearly 40-50 per cent of our turnover. We are putting in increased efforts in both product delivery as well as marketing support to grow this market for us.”

The company, currently, enjoys 6-7 per cent marketshare in the radial tyre business and around 25 per cent in non-radials.

“The focus on non-truck tyres will enable us to hedge against economic cycles which affect truck tyre sales. Moreover, while the truck tyre segment is expected to grow at compounded 2-3 per cent over the next few years, the non-truck segment is expected to post a 8-9 per cent growth,” according to Ceat vice president (sales and marketing) Kalyan Paul.

In order to spruce up its product profile, Ceat has recently launched its Spider brand of tubeless radials. This product is aimed to increase its visibility in the high profile, passenger radial market in India. This new product, is imported from Europe.

Ceat has seen its sales increasing over the past few months. Already, the OE business is seeing a great movement with impressive orders from known brands like Honda and Kinetic. Negotiations are on with the largest motorcycle company Hero Honda to obtain OE contracts.