Continental AG is a leading automotive company, headquartered in Hannover, Germany. With sales of €32.7 billion in 2012, Continental is among the top automotive suppliers worldwide.
R.K. Agarwal, Director, Sales & Marketing Head, Truck & Bus Tyres, Continental India told Sandeep Menezes that M&HCV’s replacement tyre market has hardly been affected due to non-growth in commercial vehicle industry.
Excerpts from the interview:
The commercial vehicle industry is facing a challenge with the heavy truck market declining Y-o-Y for 8 quarters in a row. Tell us about the current & long term scenario for the M&HCV tyre segment nationwide?
Although the commercial vehicle industry is not growing as expected in the past few months, it has hardly affected the replacement tyre market for M&HCV. As a matter of fact the RE market has grown in this period and pretty much we have seen a good RE market in the past one year.
The tyre segment is shifting towards more advanced products and services, with best lifecycle cost. Tell us about it?
India’s truck tyre replacement market has a volume of approximately 14 million units per year. Out of which only around 4 million units are radial tyres vis-à-vis 10 million bias tyres. Over the last five years, the market has not only grown by approximately 24 per cent, but has also seen a strong shift towards radial tyres. It is expected that radialization will gain further momentum in the next years.
The Radial tyres have more life and is technologically advanced product. It will continue moving towards High Tech tyres. Consumer is looking for good quality advanced technology products. It is this quest, where we are able to serve the customer better.
India is expected to invest $one trillion into infrastructure development during 12th plan period (2012-2017). Going forward, this will certainly benefit the OTR tyre segment. Comment.
It will benefit all segments of tyres. It will bring in more transportation need and hence Truck & Bus tyres market will also see growth.
How different is the Indian OTR market compared to other Western nations? What are the difficulties fulfilling user requirements for OTR tyres in India? comment.
Going by the general business understanding, it is but natural that such investments in infrastructure will benefit OTR market.
Currently Continental has an annual production capacity of 220,000 radial truck tyres, a dealer network of more than 1,400 outlets and sales & customer service teams in more than 70 cities nationwide. Tell us about Continental’s future business strategy?
220,000 is our ramp-up production volume. It is a usual step to grow after ramp-up has been successful. Our focus is here to perfectly align with market needs. The TBR market in India is far from being established. It is still growing and there is still a lot of dynamics. Our strength is a dedicated portfolio, based both on our long standing, international experience in TBR technology and our localization approach in India with local production and a local research & development to taylor-make our tyres for India. Last but not least, we are the only multinational manufacturer who can provide fleets both with TBR and TBX, i.e. Continental is the only one-stop tyre provider for Indian fleets, the vast majority of which uses both product types.
Recently Continental commenced production and distribution of radial truck tyres in the Indian market. How has been the initial customer acceptance?
We bring a long standing expertise with TBR technology with us. Continental CVT has proven worldwide in different markets of all levels of maturity that we are capable to taylor-make premium tyres for local needs. The applications in India are very demanding; this is why our launch portfolio has a specific strength in durability. In addition, we work with our fleet customers towards a professional tyre handling and management. This also includes avoiding severe overloading of the truck. We pass on our experience in this regard – it will make our fleet customers successful in a more and more radializing transport market.