A. S. Mehta, Marketing Director, JK Tyres in an Exclusive Interaction with B&E
JK Tyres is the leader in the truck tyres segment and has been facing problems after the government relaxed the policy for the import of truck radials. A. S. Mehta, Marketing Director, JK Tyres gets candid with B&E on the future outlook and challenges for the sector. Some excerpts:
B&E: By when are you expecting the rubber prices to cool down?
AS: According to me, the prices should come down by end of July or August this year. However, that will again be around the Rs.160 mark. Having said that, it is believed that by September, the price will come down to Rs.150-155/kg and if it happens, along with fall in price of other commodities, it will provide a lot of relief to Indian tyre manufacturers. As of today, the rise in prices of the input cost is one of the biggest challenge in front of the tyre industry.
B&E: As the aftermarket segment is only going to get bigger in the time to come, do you have plans to open exclusive outlets too?
AS: When we appoint dealers, there are some dealers that want to do exclusive business with the company. We have a good mix of exclusive dealers and multi-brand counters. JK Tyres have a whopping number of 130 exclusive dealers in the country but we do not plan to open company owned company operated retail chains across the country.
B&E: What is your take on the rising imports of the Chinese tyres in the Indian market?
AS: Since the point of time the policy on the import of the Chinese radials has been relaxed is a very big threat for the industry as of today. The duty on natural rubber today is 20% and when you import tyres, you can import it at 10%. Moreover, importing from places like Sri Lanka attract a 0% duty and other ASEAN countries, you can import at 8%. What is happening here is when one imports a tyre, one has to pay 20% and when one import tyres, it attracts a lower duty. Hence, ATMA has requested to the government that either you raise the duty on the import of tyres or lower the duty on the import of rubber so that the play field is leveled.
JK Tyres is the leader in the truck tyres segment and has been facing problems after the government relaxed the policy for the import of truck radials. A. S. Mehta, Marketing Director, JK Tyres gets candid with B&E on the future outlook and challenges for the sector. Some excerpts:
B&E: By when are you expecting the rubber prices to cool down?
AS: According to me, the prices should come down by end of July or August this year. However, that will again be around the Rs.160 mark. Having said that, it is believed that by September, the price will come down to Rs.150-155/kg and if it happens, along with fall in price of other commodities, it will provide a lot of relief to Indian tyre manufacturers. As of today, the rise in prices of the input cost is one of the biggest challenge in front of the tyre industry.
B&E: As the aftermarket segment is only going to get bigger in the time to come, do you have plans to open exclusive outlets too?
AS: When we appoint dealers, there are some dealers that want to do exclusive business with the company. We have a good mix of exclusive dealers and multi-brand counters. JK Tyres have a whopping number of 130 exclusive dealers in the country but we do not plan to open company owned company operated retail chains across the country.
B&E: What is your take on the rising imports of the Chinese tyres in the Indian market?
AS: Since the point of time the policy on the import of the Chinese radials has been relaxed is a very big threat for the industry as of today. The duty on natural rubber today is 20% and when you import tyres, you can import it at 10%. Moreover, importing from places like Sri Lanka attract a 0% duty and other ASEAN countries, you can import at 8%. What is happening here is when one imports a tyre, one has to pay 20% and when one import tyres, it attracts a lower duty. Hence, ATMA has requested to the government that either you raise the duty on the import of tyres or lower the duty on the import of rubber so that the play field is leveled.
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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