TVS Srichakra Ltd., a leading tyre manufacturer, plans to invest ₹1,000 in capital expenditure over the next three years, saysP. Madhavan, executive vice-president (EVP), sales and marketing. Edited excerpts
Describe your performance in the first five months?
Between January and May, volumes have grown by over 150% against the same period last year in the replacement market and revenues have kept pace in the domestic market. Over the last three quarters and before widespread lockdowns happened owing to the second wave of pandemic, we could effect a distribution expansion to over 125 districts and unveil more than 10 new products in the growing tubeless-tyres segment. We also worked on products to enter the small commercial vehicle-tyre segment.
How about capital expenditure?
We had announced a phased capex of ₹1,000 crore and this investment is planned to be made over a 3-year period. The investment, when fully made, will result in an increase in two- and three-wheeler tyre capacity by 25-30% and doubling of off-highway tyre (OHT) capacity from the current levels. At this point, we are on track to complete Phase 1 of the project by end of this year and Phase 2 by the end of next year.
What made you to introduce new range of tyres during the pandemic?
Without doubt, COVID-19 has hit the world hard and the second wave, in particular, has reached our doorstep. Despite the roadblocks on account of various restrictions, we took utmost precautions to continue with our effort and be a part of the post-pandemic economic recovery. This will be even more crucial for the two-wheeler industry considering the issues that will prevail on account of constrained shared mobility.
We used this phase for a thorough and careful design process, during which we studied market trends and riders’ needs. We also completed various cycles of prototyping, which then were thoroughly tested in our laboratories, in racetracks and roads as well, both in India and Europe, the result of which is being appreciated by customers across Europe.
What were the main reasons for entering the European scooter-tyre market first?
Europe, as a market, is far more advanced and challenging for any brand that is entering it. As a manufacturer of two-wheeler tyres for over three decades, we were confident of making a mark even in developed markets.
Scooters in Europe are the most popular segment amongst two-wheelers riders. Our prediction is that the period after the pandemic will see an increase in their usage as people will tend to avoid shared mobility solutions and public transport. Scooters offer a cost effective, reliable and a quick alternative to this. It’s also a segment where our expertise really gave us a push while developing this product, of course, in constant synergy and coordination with our Milan R&D centre.
What more products can we expect in this line up?
Eurogrip, as a bike tyre specialist brand, will continue to invest and expand its presence in all powered two-wheeler segments: Touring, Off-Road, On-Road, Trail and many more, all in due time.
Right now, we are in the middle of testing an off-road tyre (Motocross/Enduro), and the results, so far, have been outstanding. Post this, we’ll move to a street product in radial as well as bias construction for motorcycles of medium and high displacement.
Do you have plans to set up a manufacturing facility in Europe?
We are at present focusing on capacity expansion in India for two-wheelers and OHT. We have earmarked a significant capex for this purpose.
Can we see the European products in India?
As a global company, our products will be made available wherever we believe there’s a strategic need for them. Even though India and Europe markets are quite different, the emerging new Indian rider is evolving and it will result in bringing the two worlds closer, making it even simpler to establish a unique worldwide range. Soon, new products introduced in Europe will be introduced in the Indian market as well as all countries where TVS Srichakra has established a distribution network.
Did you try anything new in 2020 in the pandemic and post pandemic scenarios?
In the pandemic and post-pandemic scenarios, we tried reaching out to our retail partners and end customers in new, innovative ways. We were already ahead of the curve in terms of our digitalisation efforts with trade and so, we reinforced the importance of using technology and strengthened app-based communication with trade.
In the third quarter, we also introduced a national level, category first, technology enabled, instant gratification consumer promotion (TVS Eurogrip Tyre Mela) where customers who purchased our products won e-vouchers instantaneously. As markets were just unlocking and opening up, we received a good response to some of these initiatives.
In terms of our internal way of working too, 2020 saw a paradigm shift. Teams connected regularly through virtual huddles and we started knowledge sharing amongst ourselves a lot more – this helped increase collaboration and productivity
What strategies were deployed to be visible and expand into small and rural markets?
Our activation and trade-marketing efforts during the pandemic really helped us engage with retailers and made the brand visible in small and rural markets as well. Our sales and trade marketing teams were amongst the few that were active all through the pandemic period, and these efforts paid off well to help instil confidence in trade. We had extensive retail reach-out programmes and mechanic activations across markets (over 4,500 numbers) with emphasis on retail-point visibility and brand promotion.
