A SUMMER TRAINING REPORT

ON
MARKETING TRAIT TVS TYRES

SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENT
OF BACHELOR OF BUSINESS ADMINISTRATION (BBA),
GURU JAMBESHWAR UNIVERSITY, HISAR

TRAINING SUPERVISOR

SUBMITTED BY

Acknowledgement
The present work is an effort to throw some light on Marketing
Trait TVS Tyres. The work would not have been possible to come
to the present shape without the able guidance, supervision and help to
me by number of people.

With

deep

sense

of

gratitude

acknowledged

the

encouragement and guidance received by my organizational guide

Prof. Shah Washim and other staff members.
I convey my heartful affection to all those people who helped
and supported me during the course, for completion of my Project
Report.

Table of Content
INTRODUCTION

BACKGROUND

OVERVIEW OF THE SITUATION

SEGMENTATION OF INDIAN TYRE INDUSTRY

Technology based

Use based

Markets

Market Share and Size

Peculiar Features of the Tyre Industry

Demand Drivers

Trends in Raw Material

Opportunities Lying Ahead

Threats

Tyre Company Profiles

RESEARCH HYPOTHESIS

RESEARCH OBJECTIVE

BENEFITS OF THE STUDY

SCOPE OF THE STUDY

PROBLEM CONTEXT

 INDUSTRY/ORGANIZATION/PERSPECTIVES/IMPLICATIONS

CONCEPTUAL FRAMEWORK

DEFINITION/OPERATIONALIZATION OF TERMS

RESEARCH DESIGN /METHODOLOGY

RESEARCH SAMPLING AND DESIGN

RESEARCH VARIABLES AND MEASUREMENT

DATA COLLECTION METHODOLOGY

LIMITATIONS OF TRESEARCH

DATA PRESENTATIONS AND FINDINGS

PRESENTATION OF DATA

DATA ANALYSIS

SWOT ANALYSIS

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

CONCLUSION
RECOMMENDATIONS
REFERANCES

INTRODUCTION
TVS Ltd, a part of the RPG Goenka group, is the second largest
tyre manufacturer in the country after MRF. TVS manufactures
truck & bus, passenger car, scooter and LCV tyres. The company
is a dominant player in the truck & bus and passenger car tyre
segments with a market share of 14% and 17% respectively. In
FY2000, TVS did well to posting a 21%yoy sales growth in the
replacement market for truck & bus tyres. It is presently
focusing on catering to the fast growing passenger car and twowheeler industry. Towards this, it is commissioning a new radial
tyre factory in June 2000.
Industry basics
Tyre industry is capital intensive and as capacities come in
spurts, it leads to constant demand-supply imbalances and
consequent cyclicality in prices. Variable cost is also very high,
with raw materials forming nearly 70% of the costs. Profit
margins are therefore thin. Production process is technology

intensive and globally huge sums are invested in R&D. Tyre

demand is a derived demand, dependent on the auto industry,
both for OEM and replacement market. The major segments are
Truck & Bus (T&B) tyres and car tyres. Value share of T&B
segment is about 73%. This segment is highly competitive and
margins are typically lower than in the car tyres segment.
Replacement market forms the largest segment (about 58%),
followed by OEM (about 22%). Export accounts for about 15%.
With global demand slowing down, there is a consolidation of
capacities through mergers etc. The domestic tyre industry
broadly mirrors the market characteristics of the global industry.
However, due to rough road conditions, the more rugged,
suitable and cheaper cross ply tyres are in vogue. Consumption
of natural rubber is, therefore, proportionately higher. The
government has decided to impose 10% safeguard duty on
carbon black and hiking benchmark prices of natural rubber (2530% of sales) in February 1999. Its impact was felt only to an
extent as prices of these commodities are ruling at historical
lows in the global market.
TVS is part of the RPG group, which is diversified, with presence
in major sectors like power, fertilizers, pharmaceuticals, tyres,
computer, telecom, financial services etc. The group stumbled
trying to grow via diverse platforms and has many companies
that have turned sick. But lately the strategy seems to be one of
restructuring and consolidation. The group is divided into 4
broad areas - rubber & allied products, power, electronics &
telecom and chemicals. TVSs investments in its subsidiaries

have also come down this fiscal which is a sign of prudence on

the management. BUSINESS DESCRIPTION
TVS is a manufacturing company, which produces rubber, tire,
nylon fabric products, nylon tire yarn, glass fiber, automotive
flaps,

filament

automotive

mats

markets

and
in

other

India.

rubber

The

products

company

has

for

the

well

established research and development center that evaluates the

application and development of new raw materials, compounds
and tire sizes. It produces tires for two and three wheeled
vehicles, passenger cars, LCVs, trucks and buses. TVS exports to
almost 50 countries, with the US being the largest destination.
The company also provides investment financial services through
Meteoric Industrial Finance and Atlantic Holdings. Automotive
tire sales account for around 90% of revenues, automotive tubes
account for about 8% and the remaining revenues come from
other non-core operations.
The company is pursuing a strategic initiative of intensifying
outsourcing to expand its product range and increase production
volumes. TVS has an agreement with Pirelli of Italy for
outsourcing radial tires which are being marketed under the TVS
Spider Radials brand name.

TVS INDIA
TVS Limited is a manufacturer of tires in India. Automotive tires
comprise the largest part of the Company's revenue, however it

also produces tire flaps, rubber tubing and nylon thread. The
Company also offers financial services through TVS Financial
Services Limited, including hire purchase, office equipment
finance, container and equipment/infrastructure leasing and
money market operations.

History
TVS stands for Cavi Electrici Affini Torino (Electrical Cables and
Allied Products of Turin).
TVS International was first established in 1924 at Turino in Italy
and manufactured cables for telephones and railways.
In 1958, TVS came to India, and TVS Tyres of India Ltd was
established in collaboration with the TATA Group.
In 1982, the RPG Group took over TVS Tyres of India, and in
1990, renamed the company TVS Ltd.

LITERATURE REVIEW
TVS Ltd, a part of the RPG Goenka group, is the second largest
tyre manufacturer in the country after MRF. TVS manufactures
truck & bus, passenger car, scooter and LCV tyres. The company
is a dominant player in the truck & bus and passenger car tyre

segments with a market share of 14% and 17% respectively. In

FY2000, TVS did well to posting a 21%yoy sales growth in the
replacement market for truck & bus tyres. It is presently
focusing on catering to the fast growing passenger car and twowheeler industry. Towards this, it is commissioning a new radial
tyre factory in June 2000.

Industry basics
Tyre industry is capital intensive and as capacities come in
spurts, it leads to constant demand-supply imbalances and
consequent cyclicality in prices. Variable cost is also very high,
with raw materials forming nearly 70% of the costs. Profit
margins are therefore thin. Production process is technology
intensive and globally huge sums are invested in R&D. Tyre
demand is a derived demand, dependent on the auto industry,
both for OEM and replacement market. The major segments are
Truck & Bus (T&B) tyres and car tyres. Value share of T&B
segment is about 73%. This segment is highly competitive and
margins are typically lower than in the car tyres segment.
Replacement market forms the largest segment (about 58%),
followed by OEM (about 22%). Export accounts for about 15%.
With global demand slowing down, there is a consolidation of
capacities through mergers etc. The domestic tyre industry
broadly mirrors the market characteristics of the global industry.
However, due to rough road conditions, the more rugged,
suitable and cheaper cross ply tyres are in vogue. Consumption

of natural rubber is, therefore, proportionately higher. The

government has decided to impose 10% safeguard duty on
carbon black and hiking benchmark prices of natural rubber (2530% of sales) in February 1999. Its impact was felt only to an
extent as prices of these commodities are ruling at historical
lows in the global market.
TVS is part of the RPG group, which is diversified, with presence
in major sectors like power, fertilizers, pharmaceuticals, tyres,
computer, telecom, financial services etc. The group stumbled
trying to grow via diverse platforms and has many companies
that have turned sick. But lately the strategy seems to be one of
restructuring and consolidation. The group is divided into 4
broad areas - rubber & allied products, power, electronics &
telecom and chemicals. TVSs investments in its subsidiaries
have also come down this fiscal which is a sign of prudence on
the management.

Indian Tyre Industry

The tyre industry has witnessed a CAGR of 8.3% over the last
decade mainly fuelled by the strong growth in the domestic auto
industry. Though the replacement market has driven the industry
growth for long time, the OEM market has seen a robust growth
over the last couple of years.

The industry is highly capital intensive, as it requires around

Rs4bn to setup a radial tyre plant with a capacity of 1.5mn tyres
and around Rs1.5-2bn for a crossply tyre plant of a capacity to
manufacture 1.5mn tyres.
The profitability of the industry has high correlation with the
prices of key raw materials such as rubber and crude oil as they
account for more than 70% of the total costs. The raw material
to sales ratio in the industry is around 65%.
The industry has high entry barriers because of its capital
intensive nature and low operating margins. With demand
increasing at a steady pace, the industry is expected to go
through a consolidation phase.
The industry is dominated by four players viz MRF, Apollo Tyres,
JK Industries and TVS and enjoys more than 70% of the total
market share.
The fortunes of the industry are linked to the trend in the
domestic auto industry, retreading, trend in road transportation
and spending on road infrastructure.
The companies have lined up further expansion plans to meet
the increasing demand.
India Infoline Sector Studies : Indian Tyre Industry is available in
Acrobat Reader (PDF) format. The Report provides exhaustive
information on the Indian Tyre Sector, the demand drivers,
trends in the industry (with respect to production, exports,

market share), key characteristics of the Indian market and

profile of leading players in India.

Boards okay Harrisons rubber division merger with TVS

Our Bureau
MUMBAI, April 19
THE process of consolidating the rubber business of the Rs
6,700-crore RPG Enterprises got under way with the boards of
TVS Ltd and Harrisons Malayalam Ltd (HML) approving the
scheme of arrangement involving the demerger of the rubber
division of HML and its transfer to TVS.
The appointed date of the Scheme of Arrangement is fixed as
October 1, 2002.
Under the demerger plan for HML, TVS will issue 95,03,900
equity shares of Rs 10 each to HML and 36,91,081 equity shares
of Rs 10 each to the shareholders of HML in the ratio of one
share for five equity shares held by these shareholders.
The existing paid-up capital of HML will be reduced from Rs
18.45 crore to Rs 9.23 crore by reducing the paid-up value of
each equity share of Rs 10 each to Rs 5 each. Besides, TVS's

investment portfolio will be demerged and transferred to

Meteoric Industrial Finance Company (MIFL), one of TVS's nonbanking financial subsidiaries.
Under this demerger, MIFL will issue 3,52,13,320 equity shares
to shareholders of TVS in the ratio of one equity share of MIFL of
Re 1 each for every one equity share of TVS of Rs 10 each held
by

such

shareholders

in

TVS.

This

scheme

will

provide

reclassification of the unissued equity shares of Rs 10 each of

MIFL into equity shares of Re 1 each.
Post this issue of shares, MIFL will cease to be a subsidiary of
TVS and an application will be made to the Bombay Stock
Exchange for listing the company.
The objective of this consolidation is to strengthen the rubber
business by creating backward integration for TVS, an official
press release said quoting Mr Harsh Goenka, Chairman, RPG
Enterprises.
"With the merger of HML's rubber division and the divestment of
all its non-tyre assets TVS will be able to focus on its tyre
business and also improve its option for sourcing this important
raw material for its tyre manufacturing activities and bring about
synergistic effects,'' RPG Enterprises said in the press release.
TVS had earlier said that the merger of the rubber division of
HML with itself would improve the company's options for
sourcing this important raw material for its tyre manufacturing
activities and bring about synergic effects.

HML's rubber division has a turnover of Rs 50 crore from a crop

output of about 10,000 tonnes per annum, while TVS's natural
rubber consumption was approximately 50,000 tonnes worth Rs
260 crore last year.
As regards HML, the demerger of the rubber division will help it
to focus on its core business area of tea. The financial
restructuring would enable the business to grow not only its tea
business but also consider expansion into new agriculture related
food products.
The Board of HML also gave its approval for a scheme of
amalgamation of its 100 per cent subsidiaries, Harrisons Agro
Products Ltd, Harrisons Rubber Products Ltd and Harrisons
Malayalam Financial Services Ltd with itself.
The valuers to the Scheme are SBI Capital Markets & KPMG and
the advisors are Lodha & Co.
The scheme is subject to the sanction of the courts and the
National Company Law Tribunal. TVS, MIFL and HML and its
subsidiaries will apply to the High Courts for approval. Khaitan &
Co has been appointed as advocates to the scheme for this
purpose.

MARKETING STRATEGY
Boards okay Harrisons rubber division merger with TVS
Our Bureau
MUMBAI, April 19
THE process of consolidating the rubber business of the Rs
6,700-crore RPG Enterprises got under way with the boards of
TVS Ltd and Harrisons Malayalam Ltd (HML) approving the
scheme of arrangement involving the demerger of the rubber
division of HML and its transfer to TVS.
The appointed date of the Scheme of Arrangement is fixed as
October 1, 2002.
Under the demerger plan for HML, TVS will issue 95,03,900
equity shares of Rs 10 each to HML and 36,91,081 equity shares
of Rs 10 each to the shareholders of HML in the ratio of one
share for five equity shares held by these shareholders.
The existing paid-up capital of HML will be reduced from Rs
18.45 crore to Rs 9.23 crore by reducing the paid-up value of

each equity share of Rs 10 each to Rs 5 each. Besides, TVS's

investment portfolio will be demerged and transferred to
Meteoric Industrial Finance Company (MIFL), one of TVS's nonbanking financial subsidiaries.
Under this demerger, MIFL will issue 3,52,13,320 equity shares
to shareholders of TVS in the ratio of one equity share of MIFL of
Re 1 each for every one equity share of TVS of Rs 10 each held
by

such

shareholders

in

TVS.

This

scheme

will

provide

reclassification of the unissued equity shares of Rs 10 each of

MIFL into equity shares of Re 1 each.
Post this issue of shares, MIFL will cease to be a subsidiary of
TVS and an application will be made to the Bombay Stock
Exchange for listing the company.
The objective of this consolidation is to strengthen the rubber
business by creating backward integration for TVS, an official
press release said quoting Mr Harsh Goenka, Chairman, RPG
Enterprises.
"With the merger of HML's rubber division and the divestment of
all its non-tyre assets TVS will be able to focus on its tyre
business and also improve its option for sourcing this important
raw material for its tyre manufacturing activities and bring about
synergistic effects,'' RPG Enterprises said in the press release.
TVS had earlier said that the merger of the rubber division of
HML with itself would improve the company's options for

sourcing this important raw material for its tyre manufacturing

activities and bring about synergic effects.
HML's rubber division has a turnover of Rs 50 crore from a crop
output of about 10,000 tonnes per annum, while TVS's natural
rubber consumption was approximately 50,000 tonnes worth Rs
260 crore last year.
As regards HML, the demerger of the rubber division will help it
to focus on its core business area of tea. The financial
restructuring would enable the business to grow not only its tea
business but also consider expansion into new agriculture related
food products.
The Board of HML also gave its approval for a scheme of
amalgamation of its 100 per cent subsidiaries, Harrisons Agro
Products Ltd, Harrisons Rubber Products Ltd and Harrisons
Malayalam Financial Services Ltd with itself.
The valuers to the Scheme are SBI Capital Markets & KPMG and
the advisors are Lodha & Co.
The scheme is subject to the sanction of the courts and the
National Company Law Tribunal. TVS, MIFL and HML and its
subsidiaries will apply to the High Courts for approval. Khaitan &
Co has been appointed as advocates to the scheme for this
purpose.

TVS Limited
AVAILABLE NOW! LABOR PRODUCTIVITY BENCHMARKS
AND VERTICAL GAP ANALYSIS ON TVS Limited
Published today by ICON Group International, Ltd. Two of the
most comprehensive studies to date on labor productivity and
vertical gap analysis benchmarks for TVS Limited (BOM).
The methodologist for this unique study is Philip Parker, Eli Lilly
Chair Professor of Innovation, Business and Society at INSEAD
(Fontainebleau, France and Singapore). According to Professor
Parker, With the globalization of markets, greater foreign
competition, and the reduction of barriers to entry, it becomes all
the

more

important

to

benchmark

companys

financial

indicators on a worldwide basis. World stock markets have

recently witnessed a return to fundamental financial analysis.
The goal of the reports is to assist consultants, financial
managers, strategic planners, and corporate officers in gauging
certain indicators of TVS Limiteds financial and human resource
structure.
The report has benchmarked TVS Limited against competing
firms in the Tires and Inner Tubes Manufacturing industry

worldwidegoing

beyond

traditional

methods

of

company

benchmarking. The results are two specialized reports: (1) global

financial

benchmarks

using

common-size

statement

ratios

(vertical analysis), and (2) labor productivity and utilization

measures collected across borders.

Coverage
Two reports, financial ratios and labor productivity ratios, are
available for TVS Limited. Each report reveals productivity and
industry ranks for TVS Limited in the Tires and Inner Tubes
Manufacturing industry. Reports for the following and many other
Tires and Inner Tubes Manufacturing companies are available
now:

Bridgestone Corporation
Brisa Bridgestone Sabanci Lastik Sanayi ve Ticaret AS
TVS Limited, Compagnie Financiere Michelin, Compagnie
Generale des Etablissements Michelin
Continental AG
Cooper Tire & Rubber Co
DMIB Berhad (Malaysia)
Dunlop Africa Limited
Feng Tay Enterprise Co Ltd
Goodyear (Thailand) Public Company Limited
Goodyear Indonesia P.T.
Hankook Tire Co. Ltd.
Heung Ah Corp
Kenda Rubber Industrial Co., Ltd.
Kumho Industrial Company Limited
Marangoni S.p.A.
Nexen Tire

Pirelli S.p.A.
Sumitomo Rubber Industries Ltd.
The Goodyear Tire & Rubber Co
Toyo Tire & Rubber Co., Ltd.
Vredestein NV

Yokohama Rubber Company, Limited

The vertical analysis deals with questions like: How has

TVS Limiteds asset structure varied compared to global
benchmarks for the Tires and Inner Tubes Manufacturing
industry? Does it generally hold more cash and other
short-term assets, or does it tend to concentrate its assets
in physical plant and equipment? On the liability side, does
TVS Limited typically have a higher percent of payables
compared to the benchmarks, or does it hold a higher
concentration of long-term debt? Does TVS Limited have a
relatively higher cost of goods sold, operating costs, or
income taxes compared to global benchmarks? Have TVS
Limiteds returns on equity been higher or its profit
margins greater?

While the labor productivity analysis answers the following:

What has been the ratio of short-term and long-term
assets to employee? What are typical capital-labor ratios?
What are the average sales and net profits per employee
compared to global benchmarks?

Professor Parker notes, "We are intrigued by the

wide variations in basic financial and productivity
measures between TVS Limited and other Tires
and Inner Tubes Manufacturing companies. The
Earnings Before Interest And Taxes (EBIT), for
example, varied from -2.1 to 64.21. We see this
type of variation in the hundreds of ratios that we
estimate.

Methodology: Uncovering Gaps

Most vertical analyses merely focus on benchmarking against
domestic ratios, often published by government agencies or
commercial sources. In contrast, the report calculates thousands
of industry norms by looking at firms at the global level, pooling
statistics on tens of thousands of companies across over 40
countries, and applying a seven-stage methodology:
(1) identification of industry classifications,
(2) firm-level data collection and aggregation,
(3) standardization of raw statistics,
(4) filtering outliers,
(5) calculation of global norms,
(6) projection of deviations and gaps, and
(7) projection of ranks and percentiles. For each part of
the financial statement, the larger structural differences
and gaps between TVS Limited. and the global benchmarks

are

provided

with

summary

tables

of

ranks

and

percentiles.
TYRE manufacturer TVS Ltd is on the road to recovery. Yet even as it
leaves its losses behind, refuses to borrow and enhances sales, there are
sectoral issues it must confront. Mr Paras K. Chowdhary, Managing
Director, TVS, spoke recently to Business Line on the domestic tyre
industry and challenges before it.

LIMITATION OF THE RESEARCH

This report is for information purposes only and does not
construe to be any investment, legal or taxation advice. It is not
intended as an offer or solicitation for the purchase and sale of
any financial instrument. Any action taken by you on the basis of
the information contained herein is your responsibility alone and
India Infoline Ltd (hereinafter referred as IIL) and its subsidiaries
or its employees or directors, associates will not be liable in any
manner for the consequences of such action taken by you. We
have exercised due diligence in checking the correctness and
authenticity of the information contained herein, but do not
represent that it is accurate or complete. IIL or any of its
subsidiaries or associates or employees shall not be in any way
responsible for any loss or damage that may arise to any person
from any inadvertent error in the information contained in this
publication. The recipients of this report should rely on their own
investigations. IIL and/or its subsidiaries and/or directors,

employees or associates may have interests or positions,

financial or otherwise.

DATABASE AND RESEARCH METHODOLOGY

The research Methodology defines the is the purpose of the
research, how it proceeds, how to measure progress and what
constitute success with respect to the objectives determined for
carrying out the research study, the appropriate research design
formulated is detailed below.
Exploratory research: this kind of research has the primary
objective of development of insights into the problem. it studies
the main area where the problem lies and also tries to evaluate
some appropriate courses of action.
The research methodology for the present study has been
adopted to reflect these realties and help reach the logical
conclusion in an objective and scientific manner.

The important component of research methodology such

as, method of data collection, tools for processing of the data
and reporting format of the study, are enumerated as follows:

DATA COLLECTION
The present study contemplated an exploratory research.
Secondary

data:

secondary

data

which

is

already

available and published .it could be internal and external

source of data.
Internal source: which originates from the specific field
or area where research is carried out e.g. publish
brouchers, official reports etc.

External source: which originates outside the field of

study like books, periodicals ,journals, newspapers and the
internet.

NATURE OF DATA
Secondary data has been used which is collected through
articles, reports, journals, magazines, newspapers reports
prepared by research scholars, universities and internet.

TOOLS AND TECHNIQES

Analysis of data has been done with help of various statistical
tools like the tables and graphs.

DATA PRESENTATION AND ANALYSIS

This Report features up to a ten-year record of the equity Price
history for TVS Limited. Tabular results include the High, Low
and Closing price for the quarter. There is also a calculation of
percentage change in price for both Quarterly and Annual
periods. Price values are adjusted for stock splits and dividends.

TVS Limited. The Group's principal activities are to

manufacture and distribute automotive tyres, tubes and
flaps. The products include nylon fabric, nylon tyre yarn,
glass fibre, automotive flaps, filament mats and other
rubber products. The Group also provides investment
financial services. The Group supplies to over 50 countries
with the major business links in the United States of
America,

Singapore,

the

United

Arab

Emirates,

Bangladesh, Philippines, Afghanistan, and Nigeria and

other Asian, Middle East and African countries.

Layout and Content of a Typical Report

Tyre Industry April 2004 update

The tyre production in India witnessed a growth of 29.8% on a
yoy basis in the month of April 04. The most significant growth
was seen in the production of the passenger car segment, which
saw a jump of 59% to 936,853 in April 2004 as against 588,238
in April 2003. Other significant segments were the motorcycle
segment and the tractor segment. The motorcycle segment
witnessed a growth of more than 29% and the tractor segment
(Front, Rear and Trailer) registered a growth of more than 25%.

The contribution of the tyre and bus segment to the total

production in April 2004 reduced to 18.8% from 21.6% in
April 2003. The passenger car segment, which contributed
16.3% in April 2003, increased its share in total production
to 20%. The share of the tractor segment decreased from
5.1% to 4.9% for the same period.

If any indication from these figures have to be taken, the

growth in the passenger segment would be more than that
in the commercial vehicle segment in the near future. In
the recent past, there has been an ostensible shift in the
demand of two wheelers from scooters to motorcycles. The
figures for the production of tyres in the respective
segment envisage the scenario to continue in the near
term. Above average pre-monsoon showers are expected
to give positive triggers to the demand of tractors.
Increasing production of tractor tyres is an indicator for the
same.

Exports of tyres grew by a substantial 39.6% in April 2004

to 291,409 from 208,710 in April 2003. The major
contributors to this growth were the passenger car and the
scooter segments by registering a growth of 200% and
293%. During FY04, exports contributed to the tune of
20.6% and 6% to total production of tyres in truck & bus
and passenger car segments respectively. The same
figures for the respective segments were 17.7% and 5.5%
in April 2004. In FY04, the exports contributed 4.6% of the
total tractor tyres production, which decreased to 2.9% in
April 2004. This further indicates that the domestic auto
industry is all set to witness a substantial growth.

Production

Exports

(In mn) Apr-04

Apr-03

Growth Apr-04 Apr-03 Growth

Truck

& 880,275

777,280

13.3

154,695 123,760 25.0

LCV

291,828

219,895

32.7

62,677

45,475

37.8

Jeep

130,774

100,235

30.5

Passenger 936,853

588,238

59.3

51,573

17,157

200.6

Bus

Car
Total

4- 2,239,730 1,685,648 32.9

wheeler

268,945 186,392 44.3

Tractor

108,756

94,360

15.3

1,104

1,955

(43.5)

80,309

58,056

38.3

5,326

11,244

(52.6)

40,590

30,860

31.5

217

226

(4.0)

229,655

183,276

25.3

6,647

13,425 (50.5)

Scooter

796,918

611,033

30.4

12,225

3,110

293.1

Motor

1,362,593 1,054,453 29.2

2,750

1,975

39.2

8,205

646

(99.4)

(Front)
Tractor
(Rear)
Tractor
(Trailer)
Total
Tractor

Cycle
Moped
Total

18,508

(55.7)

2- 2,167,716 1,683,994 28.7

14,979 5,731

161.4

wheeler

Animal

9,514

18,585

(48.8)

Industrial 23,068

26,769

(13.8)

50

1,958

(97.4)

Off

3,176

45.2

788

1,204

(34.6)

Drawn
Vehicle

Road

the 4,613

Business Description: TVS Limited. The Group's principal

activities are to manufacture and distribute automotive
Total
37,195
48,530
(23.4) 838
3,162
(73.5)
tyres, tubes and flaps. The products include nylon fabric,
Others
nylon tyre yarn, glass fibre, automotive flaps, filament
Final
4,674,296 3,601,448 29.8
291,409 208,710 39.6
mats and other rubber products. The Group also provides
Total
investment financial services. The Group supplies to over
50 countries with the major business links in the United
States of America, Singapore, the United Arab Emirates,
Bangladesh, Philippines, Afghanistan, and Nigeria and
other Asian, Middle East and African countries.

STOCK CHART

Recent stock performance

1 Week

2.9%

4 Weeks

2.7%

13 Weeks

-8.7%

52 Weeks

-26.0%

Vision and Mission

TVS will each time every time provide Total Customer

Satisfaction through products and services of highest
quality and reliability.

TVS will nurture an exciting and challenging working

environment embedded with fairness and free, frank
exchange of views.

Current Scenario

Manufactures over 6 million tyres every year.

Enjoys 55% of the local market for light truck and truck
tyres.
Operates from plants in Mumbai and Nasik.
Exports to USA, Africa and other parts of Asia.
Has a robust network consisting of 36 regional offices, over
3,500 dealers and more than 100 C&F agents.
Has a dedicated Customer Service department, comprising
Customer Service Managers in all four divisional offices,
assisted by 50 Service Engineers.

TVS & Cricket

The first international rating system

In 1995, the Professional Management Group (PMG) and TVS

decided to transform cricket into an experience, bigger and more
exciting than anything players and fans had ever witnessed.
They decided to reward the performances of players at the
international

level.

Thus was born the first International Rating SystemTVS Cricket

Rating (CCR)a system to reward outstanding performances
across every sphere of cricketbatting, bowling, fielding and
even wicket-keeping!
A comprehensive award system
CCR encompasses all international matches (Test matches and
One-day Internationals) played over twelve months, between
May 1 and April 30. It rewards both, individual players as well as
teams, and is indeed the worlds most credible cricket rating.
A lifelong title
After twelve months of scoring centuries, sending stumps flying
and taking impossible catches, the best cricketer receives his
most fulfilling rewardthe TVS International Cricketer of the
Year. And of course, the most enduring team is rewarded too. It
wins

the

TVS

International

Team

of

the

Year.

In 1996, Brian Lara won the first 'TVS International Cricketer'

award. A year later, Pakistan won the first 'TVS International
Team' award. During the World Cup in 1999, TVS instituted the

'TVS International Cricketer of the World Cup' award, and it went

to

Rahul

Dravid

for

his

phenomenal

performance.

The experts decision is final

CCR is adeptly managed by a Governing Council comprising
cricket legends Sunil Gavaskar, Clive Lloyd and Ian Chappell. The
day-to-day affairs are overseen by Sanjay Manjerekar, the
Executive Director of the Council.

Having been in the export business for over forty years,

TVS today enjoys 14% of the Indian market share of
global exports, clients in over seventy countries, and a
turnover of US $47 million.

Exporting technologically advanced products

From five world-class plants, three in India and one in Sri

Lanka, we manufacture a wide range of tyres for all user
segments including trucks, buses, and LCVs. We also
export farm, industrial, grader, OTR, car, scooter, autorickshaw, motorcycle and passenger car radials.

Enjoying large market shares

Our individual market shares include 64% in Singapore,

22% in UAE and 22% in Philippines. We also send our
products into USA, Bangladesh, Pakistan, Vietnam, Iran,

Nigeria, Egypt and other African, Middle-East and Far-East

Asian countries.
Meeting global standards

With our manufacturing processes being globally approved

by DOT (Department of Transportation) and IN-METRO, our
products have direct entry into the US and Latin American
markets.

Honoured with Quality certificates

We are the first Indian tyre company to receive an ISO

certificate (ISO/TS 16949: 2002, in the year 2003-2004).
Over the last ten years, we have consistently been
receiving export awards from AIRAI and CAPEXIL. A rare
honour, indeed.

RESULTS AND DISCUSSIONS

Business

TVS is the second largest tyre manufacturer in the country. In

FY2000, it produced 5.72mn number of tyres as compared to
5.24mn units in FY99, a rise of 9%yoy.
Tyres

TVS manufactures truck & bus, passenger car, scooter and LCV
tyres. TVS has an extensive distribution network of more than
3,000 dealers. Though known for its quality and successful
brands such as Formula I, Endura, Secura, Samrat, Maestro,
Stamina etc, market aggressiveness has been much lower than
competitors like MRF or Apollo. During the year, TVS posted a
rise of 21%yoy in truck tyre sales in the replacement market in
value terms. This was made possible by the 22%yoy increase in
the production of truck tyres.

In FY2000, sales of tyres

contributed to 90.3% to the total turnover. During the year, the

company has launched new products under the brand names
Fleet Master, Turbo Lug and Elevata.
Tubes and flaps
The

company

does

not

have

any

production

facility

for

manufacturing of tubes and flaps. It sources the products from

other manufacturing units. In FY2000, sales of tubes and flaps
contributed to 9.6% of total turnover. It sold 5.03mn tubes as
compared to 4.47mn in FY99 and 1.34mn flaps as compared to
1.15mn in FY99.
Exports
TVS is the second largest tyre exporter after J K Industries.
Export sales on a FOB basis has fallen by 9.5%yoy from Rs1.2bn
in FY99 to Rs1.08bn in FY2000. Export sales were hampered by
a demand decline in the US market.

Its Sri Lankan venture Associated TVS Pvt Ltd has a 55% share
of the Sri Lankan market. In November 1998, the company tied
up with a local firm, Kelani Tyres Ltd. This merger would have
combined production capacity of 34 metric tons. The turnover of
the JV grew from Sri Lanka Rs1.29bn in FY99 to SL Rs1.36bn in
FY2000. Profit before tax rose 28%yoy to SL Rs75mn.
Expansion plans
The company has planned a capex of Rs1bn spread over the
FY2000 and FY01. While Rs400mn will be spent on capacity
upgradations, Rs600mn will be utilized for a new radial facility at
its Nashik plant, which as part of the first phase will start
commercial production in June 2000. A greenfield project is likely
to be set up in the second phase. The company had taken over
Rado Tyres in Kerala in FY98 and plans to increase its
manufacturing capacity from 15,000 to 40,000 in the first phase
and 70,000 in the next phase.
Outlook
TVSs fortunes are now (post restructuring) entirely linked to the
tyre industrys fortunes. As a leading player in the commercial
vehicle, passenger car market and two-wheeler tyre segments, it
is expected that the company would take advantage of the
continuing growth in these segments. The new radial tyre plant
coming up in Nashik would help the company find a foothold in
the fast growing segment. Even in the export market, the
company is reducing its dependence on standard bias-ply

products and concentrating on niches. The company has done

well by rationalizing its debt portfolio by replacing short-term
loans with long term financing from FIs. This has brought down
interest costs as has been witnessed in FY2000. However, with
sale of investments in its many subsidiaries, TVS can no longer
prop its operational income with other income. Moreover,
operating margin will be affected by the rise in prices of raw
material inputs. With augmented capacities for car radial tyres
and two/three wheeler tyres and initiatives in the field of supply
chain management and controlling costs, TVS is expected to do
reasonably well for the rest of the fiscal.
Demand determinants

Growth

of

automobile

industry

will

increase

vehicle

population and thereby the demand for tyres in the OEM as

well as the replacement markets.

Relative importance of road transport and long distance

travel by road leading to increased need to replace tyres.

Development of export market will also enable higher

capacity utilization levels.

Economic scenario and credit availability will determine

ability to purchase automobiles and in turn spur demand
for tyres.

Retreading saves up to 80% on original cost and this will

have a negative impact on fresh demand.

Radialisation increases the life of tyres and reduces the

need for a replacement, which may inhibit volume growth.

Earning drivers

Raw material price fluctuations: Prices of natural rubber, an

agricultural commodity. Other raw materials are mainly
petrochemical based and movements are cyclical.

Freeing imports of radial tyres will affect margins in that

segment.

TVS Tyres targets 14 per cent growth

MUMBAI, Sept 15 (PTI) R P Goenka controlled TVS Ltd has set
a sales target of around Rs 1400 crore for the current year while
the profits of the company are expected to increase by 14 per
cent over last year.
In the first five months of the current fiscal, the company has
recorded sales of Rs 533 crore which is 19 per cent more than
the corresponding period last year, Vice-Chairman Harsh Goenka
told shareholders at its 40th AGM here today.
In order to emerge as a market leader, the companys
management has set a growth target of 14 per cent against a
projected industry growth of 6 per cent, he said.
The company intends at least a one per cent growth in market
shares in all the segments it operates in, Goenka said. At

present, in scooter tyres it has a market share of 21 per cent,

motorcycles 11 per cent and car tyres 19 per cent.
Export turnover is expected to be around Rs 140 crore this fiscal,
Goenka said. It mainly exports to the United States, West Asia,
Africa and South America.
TVSs exports last year dipped to Rs 128 crore from the previous
years Rs 153 crore chiefly due to the South Asian crisis and lack
of demand from the US and Latin American countries.
Essel Packaging: The Board of Directors of Essel Packaging
Limited yesterday announced payment of a special millennium
dividend of 150 per cent to its equity shareholders.
RESULTS AND DISCUSSION
Results (FY2001)
May 08, 2001

Sales of tyre major TVS limited declined 11.7% on the

back of sluggishness in truck and passenger car tyre sales.
Sales in this fiscal were Rs 11,904mn as compared to Rs
13,477mn in the previous year. The 11 months from April
2000, to February 2000, has been a period of nearstagnant growth for the domestic tyre industry, with the
production increasing by mere 1% compared with the
same period last year.

Total expenditure came down by 9.2% to Rs 11,665mn (Rs

12,844mn). Operating profit dipped 38% to Rs 564mn (Rs
910mn).

Continuing non-tariff barriers in the newly emerging

markets, allowing direct import of natural rubber only
through STC and sharp rise in price of petro products have
all combined to severely dent the profitability of the
company. OPM as a percentage of total income came down
to 1.9% (4.6%).

Depreciation increased 13.5% to Rs 165mn (Rs 145mn).

The rise was due to new plant that has been commissioned
in Nasik.

TVS reported a net loss of Rs 137mn as compared to a

profit of Rs 201mn in the previous fiscal. This may be
attributed to drop in demand and higher input costs on one
hand and slowdown in exports on the other.

The company will have to face competition through

effective cost control, higher operating efficiency and new
marketing strategies.

Financial Highlights
Period to

03/01

03/00

Growth

Rs in mn

(12)

(12)

Sales

11,903.6

13,476.8

(11.7)

Other income

325.7

277.3

17.5

Total income

12,229.3

13,754.1

(11.1)

Expenditure

(11,665.4)

(12,844.0)

(9.2)

Operating profit

563.9

910.1

(38.0)

Interest

(534.2)

(537.4)

(0.6)

Depreciation

(164.8)

(145.2)

13.5

PBT

(135.1)

227.5

Tax

(2.0)

(26.4)

PAT

(137.1)

201.1

Adjusted OPM (%)

1.9

4.6

Equity

350.9

350.9

EPS (Rs)

5.7

Company Results

Scrip Code : 500878

Type Audited

Date Begin 01 Apr 04

Date End

Company Name : TVS LTD

Audited

UnAudited Audited

01 Apr 03

01 Apr 02

01 Apr 01

31 Mar 05 31 Mar 04 31 Mar 03 31 Mar 02

Description

Gross Sales 17803.1

16479.5

14882.7

13613.7

Excise Duty -2523.2

-2471.2

-2750.5

-2474.7

Net Sales

14008.3

12132.2

11139

Other Income

Total Income 15669.7

15230.5

12407.6

11373

Expenditure -14884.4

-13817

-11417.3

-10576.7

Operating Profit

Interest

Gross Profit 143.4649.4 511.5223.6

Depreciation -220.6

Profit before Tax

Tax

Profit after Tax

10

15279.9

389.8 1222.2

785.3 1413.5

-641.9

-764.1

275.4234

990.3796.3
-478.8

-221 -218.4

-77.2 428.4293.135.2

-81.6 -109 -11.2

-67.2 346.8184.124

-572.7

-188.4

Extraordinary Items

48.5 -206.2

Net Profit

Equity Capital

Reserves

EPS

Nos. of Shares - Non Promoters

2932.3

-18.7 140.6 184.124

351

2618.1

350.9350.92993.4

-0.53 4.01 5.24 0.68

20473118 20473118

20473318

Percent of Shares - Non Promoters

Result Type A

Notes

58.1458.1458.14-

ln a significant move, the Rs.1,500-crore TVS Ltd has tied up

with leading portal Yahoo India as part of its online marketing
strategy. With this tie-up the company plans to roll out a host of
online promotions and Internet ads in a bid to connect with the
youth segment. In fact shedding its fuddy buddy image, TVS Ltd.
id now exploring new mediums to create a contact point with its
consumers.
As for TVS's tie-ups with other portals, says TVS Ltd vicepresident (marketing) Kalyan Paul: "We are in talks with other

portals but it's too early to talk about it now. Incidently, the
company has an online presence with a Website for its sports
property TVS Cricket Ratings. Adds Mr. Paul: This property is
now being made more accessible to cricket fans by promotion
through tie-ups with portals such as Yahoo India. Clearly, the
company is now stepping up its online marketing plans to woo
the youth segment.
Cashing in on the growing popularity of Short Messaging Service
(SMS) also plans to enter this alternative medium to touch base
with its target audience. In addition to the Net, we are
evaluating all formats which will help us connect with the youthSMS included, informs Mr. Paul.
As Indian corporates are increasingly opting for new media tools
to connect with the youth segment, why has TVS Ltd. opted for
this mode of marketing now? Mr. Paul explains that as part of its
new marketing plan to develop a younger image for the brand,
TVS is now exploring new mediums to create a contact point
with its consumers. "Since, there is a lot of synergy between
two-wheeler owners and the Net audience, the company is
planning to use Internet as a medium. A plan is being put into
place to use this interactive medium to build the TVS brand
among the youth, who are todays consumers for two-wheeler
tyres and future ones for car tyres, he adds.
To meet the objective, the company is now using tools such as email newsletters which give tyre users an opportunity to
understand the brand better.

So with these new online initiatives, is the company going for a

totally new brand image? According to Mr. Paul, the TVS brand is
strong among the target audience and the company is not
looking at changing the brand equity or positioning. The existing
brand plank Born Tough has universal and timeless appeal, with
a young and with-it audience.
"We intend to create a relationship with new users (youth) to
create a market for the future by catching consumers at the
beginning

of

their

purchase

life-cycle

and

maintaining

relationship based on the delivery of superior value, he reasons.

As for the future of online marketing in India, Mr. Paul observes
that in today's dynamic media environment, online tools are
enabling marketers to target their messages more effectively to
the relevant audience.
COMPETITORS
India is a manufacturer, expor-ter and importer of Off-The-Road
(OTR) tyres. TVS, MRF, Goodyear, Balkrishna Tyres, Vikrant Tyres
and TVS are the major manufacturers of OTR tyres in the
country. OTR tyres account for 11 per cent of the country's total
tyre market which is estimated at Rs 12,500 crore. Large-sized
OTR tyres are imported, as their demand volume is low and it
makes more economic sense to import. Also, OTR radials are not
manufactured here and they are also imported. Bridgestone,
Yokohama, Michellin and Pirelli are the MNCs supplying bigger
OTR tyres in this country. Similarly, India also exports OTR tyres

to

other

countries

including

Europe

and

America.

OTR tyres, in India, have gained the limelight because of the

government's massive expenditure programme in infrastructure
building,

especially

in

road

construction.

In

fact,

the

government's Golden Quadrilateral project has given a new lease

of life to this otherwise sinking industry. Till 2000-01, the
industry's production was almost stagnant at around 36,00037,000 tyres; in 2002-03, the production of tyres crossed
50,000 numbers. And this year its performance is expected to be
even better. Industry sources claim that production of OTR tyres
should touch 72,000 during 2003-04, a growth of 44 per cent.
During the first 9 months of the current year, the industry has
achieved a growth of 48 per cent.
Says Tom K. Thomas, Vice President (Technical), TVS Ltd,
"Growth in OTR tyres was insignificant a few years ago. But the
NHDP project has increased the demand for these tyres. During
the next few years the demand for OTRs should grow at the rate
of

around

20

per

cent

every

year."

Despite this the mining industry remains the main customer of

OTR tyres in the country. "Nearly 65 per cent of the demand for
OTRs comes from Coal India Ltd," says N. Ganesh, Chief
Manager (R&D), TVS Ltd. BEML and Caterpillar are the other
major customers of the industry. In the foreseeable future the
mining sector is expected to remain a major customer for OTR
tyres.
An important feature of the OTR tyres industry is that majority of
the production (nearly 67 per cent) is exported. Last year

exports saw a substantial jump of 56 per cent. The industry

exported 33,530 tyres during 2002-03 as against 21,468 in the
previous year. One of the main reasons for the industry's over
dependence on exports for its survival is the low domestic
demand. Once the domestic demand picks up growth in exports
is expected to come down. And this year the industry is expected
to export 36,200 tyres, which is 50 per cent of the domestic
production. However, the OTR tyres industry is facing some
serious problems. The main cause of worry is rising raw material
prices, mainly natural rubber and petrochemical based raw
materials. India is the third largest producer and fourth largest
consumer of natural rubber, and fifth largest consumer of natural
rubber and synthetic rubber together in the world. Natural
rubber accounts for nearly 26 per cent of the raw material cost
of the industry. Says Tom K. Thomas, "Rising price of natural
rubber

has

affected

our

margins

badly.

Whatever

China

consumes, the price of the same goes up, and whatever China
produces the price of the same goes down. Banning exports is
not a solution. We may have to increase the price of OTRs, as we
are planning to do in the near future."
Technologically, the Indian OTR tyres industry is a step behind
the developed nations. OTR radials are not yet manufactured in
India. Nor do the major players have any plans to manufacture
the same in the near future. But OTR radials have certain
advantages over traditional tyres. OTR radials are costlier; nearly
30 per cent more than the cost of ordinary OTRs. The life of OTR
radials is longer than that of traditional tyres by more than 60

per cent. Also, OTR radials result in saving in consumption of

fuels. OTR radials also provide comfort to the driver thereby
reducing fatigue. Industry experts foresee good growth potential
for the industry in the coming years, both in the domestic
market and export market. OTR tyre manufacturing is a labour
intensive operation and as a result its production abroad is on
the decline. This gives India good scope to expand its market
abroad. Also, in the domestic market, there is expected to be
more demand for Grader and Compactor tyres because of
enhanced road construction activity in the country. "Import of
tyres from China has just started. It may pose a threat in the
coming days. Quality of the tyres is suspect but they are
cheaper," Tom K. Thomas of TVS avers. In the coming days
retreading of OTR tyres could become big business. At present, it
is dominated by a handful of players in the country. Considering
its potential many players may take the plunge in the retreading
business. Manufacturers may employ higher productivity building
machines like orbitread technology for quality enhancement.
Besides, the country may start producing bigger size tyres which
were hitherto imported.
RESULTS AND DISCUSSIONS
Industry Overview:
During the year under review, the Tyre Industry grew by 7% in
value and approximately 9% in volume. This clearly reflects the
prevailing excess capacity situation.

The Tyre Industry continues to bear the brunt of increasing

raw material costs. Rubber imports are still controlled,
resulting in high prices. Additionally, the prices of synthetic
rubber

and

rubber

chemicals

have

risen

steeply

in

international markets. There has also been 2% increase in

excise duty, effected by the Union Budget announced in
February, 2000 on all tyres, except two wheeler and farm rear
types.

Thus, while there are valid reasons for a commensurate

increase in prices, the intense competition has prevented this
from happening. Margins, therefore, are under pressure.

3. TVS'S Performance:

The year 1999-2000 saw TVS move out of the consolidation

phase and surge ahead with increased visibility in the market
place.

Significant

product

quality

improvements,

innovative

marketing strategies, a unique supply chain management

model, cost optimisation measures, and a committed work
force, all saw the Company emerge stronger inspite of
increased competition. In doing so, TVS further reinforced its
"Born Tough" image and emerged as a preferred brands.

TVS's growth rate of 15%, which was twice the industry

growth, was a matter of great satisfaction. Particularly
heartening was the 21% increase in the high value truck tyre
category in the replacement market which was made possible
by a 22% increase in truck tyre production the highest in the

country. TVS gained market share in other replacement

segments as well, further reiterating its superior product
quality,

borne

out

of

improved

technical

design

and

manufacturing processes.

Other contributing factors to this improved performance have

been the inculcation of the "Total Quality Management"
culture, intensified training, exposure and involvement of
employees at all levels, which have enabled a flexible market
led manufacturing system to evolve. Constant initiatives were
taken for more effective utilisation of resources and reduction
of costs. These will be intensified even further in the future.

A lot of new initiatives in marketing were undertaken. A new

advertising campaign and innovative communication during
the Cricket World Cup which promoted the TVS Cricket
Ratings, helped improve brand visibility. The new look TVS
Shoppes were launched in phases across the country and
have already set new standards in tyre retailing. A unique
dealer loyalty programme to further reinforce TVS's long
standing relations with dealers elicited excellent response.

The consistently high quality of after sales service was

maintained with the implementation of an ongoing training
programme for all staff associated with this service, including
technical service personnel at the dealer outlets.

The integrated logistics system - which links 126 stocking

points with the two factories continued to work well and

ensured availability of the right product at the right time,

hereby keeping inventory levels low.
4. Exports:

The decline in demand from the US market, which was

flooded with cheap brands from all over the world, led to
TVS's exports declining by 7.5%. Strategies have been drawn
up to reverse this situation and steps to penetrate other
markets have already been taken. These initiatives will see
exports on the growth path once again.

5. Manufacturing:

The capacity optimisation projects at the Mumbai and Nasik

Plants are progressing on schedule. The new radial tyre
facility coming up at Nasik is expected to be completed on
time with manufacturing commencing in May-June 2000.

The Off-take Agreement for radials and two and three wheeler
tyres with erstwhile joint venture partner, Goodyear, expires
in August 2000. This may be extended for a further period.

The expansion plan at TVS's associated company, Rado Tyres

Ltd, located in Kerala, has been implemented. This will
enhance the conversion capacity of two and three wheeler
tyres to 70000 tyres per month.

6. Joint Venture in Srilanka:

The Joint Venture structure of the Strategic Alliance in Sri

Lanka which TVS, jointly with Associated Motorways Ltd,
entered into with Kelani Tyres Ltd, effective 1st November,
1998, has been completed.

The

turnover

of

this

joint

venture,

under

TVS-Kelani

Associated Holdings Pte Ltd, grew from SL Rs1293 mn in

1998-1999 to SL Rs1357mn in 1999-2000. Profit before tax
rose 28% from SL Rs58.65mn to SL Rs75mn during this
period.

The Indian Tyre Industry is a vibrant segment of the Indian

economy and is the wheels of the entire road transport sector
of India, producing over 23.7mn tyres (4 Wheeler Tyres
Organized Sector) in FY03. In addition, there is a production
of 25.7mn tyres in 2/3-wheeler tyre segment. The steady
growth of the industry can be gauged from the fact that the
industry is growing at an annual growth rate of 6%, however
there is an excess supply over demand in certain categories.
The total industry turnover in FY03 was Rs128.4bn and is a
significant contributor to the Indian exchequer to the extent
of Rs44bn by way of excise and other taxes. Approximately
80 % of the Industry production, in terms of value, comes
from Heavy Commercial (Truck /Bus) and Light Commercial
tyres.

The Indian tyre industry caters to all segments of the market i.e.

OEM

Replacement

STU

Defence

Exports

The total size of domestic market (4 wheeler tyres) can be

estimated around 19.4mn tyres/annum for the FY03 and is
expected to go up to 28.4mn tyres/annum by FY08. In addition,
the tyre industry exports Rs13bn of tyres across 6 continents
and over 60 countries.
FY03 has seen a recovery in tyre Industry, due to up
swing seen in automobile industry? Do you expect the
trend to further intensify?
Overall the year was better in terms of tyre consumption.
Buoyancy has been observed in production and sales of all
categories of vehicles during the year. Truck & Bus production
grew by 23.6%, LCV by 31.9%, Car by 11.5%, MUV and Jeep by
8.2%. Tractor vehicle production, which declined during the year,
however is showing some signs of improvement, due to good
monsoon this year.
We expect the growth trend to further intensify. Truck & Bus
segment will continue to grow along with Passenger Car & MUV
segment in double digits. Also we are expecting tractor segment
to emerge out of red.

What are the major threats for the Indian tyre industry?

Opening of Indian economy, reduction in import duties and

concessional import tariffs for countries like China and
South Korea (under Region Trade Agreements) shall lead
to high volume of imported tyres.

Particularly in light of the fact our countrys infrastructure

continues to remain inadequate and incompetent. e.g.

Power

rates

are

very

high

apart

from

inadequate availability.

Cost of money very high

Manpower productivity is poor

Some progress in road and ports sector

Ever rising raw material costs, petroleum prices have a

direct bearing on the health of tyre industry

Being the core sector, tyre industry performance is directly

linked with the performance of the overall economy and
the automobile sector.

Tyre

industry

performance

also

is

impacted

by

the

performance of agricultural sector.

As the future unfolds, the tyre industry may be impacted

by competition form railway sector.

The sizes of the Indian tyre manufacturing plants are not

of global scale and hence some of them may find the going
difficult.

We are hopeful of improvements in these areas of infrastructure

development.

The raw materials cost are rising.

The rising raw material costs will certainly impact the

operating margins. We will make efforts to reduce the impact
by improving the productivity and efficiency. However, if
impact is substantial we will have no other option, but to
increase the selling price of the tyre.

We do have long-term contract with suppliers. However,

prices are fixed for a quarter or six-month. There after it
varies depending upon crude prices as most of the raw
material, except natural rubber, are petroleum based.

What is the USP of the Company?

Continuous innovation and state of the art technology backed

by quality is the mantra of success at JK Tyre and this has
given us a clear competitive edge over our competitors.

JK Tyre, Pioneered the Radial revolution in India two decades

ago and ever since then we have been riding the technology
ladder. We offer the entire range of 4 wheeler radials i.e.
Truck & Bus, LCV, Car, Jeep and Farm. We launched Indias
first eco-friendly range of colored radials and are set to drive
the second green revolution with the launch of the tractor
radial.

Globally radialization in the truck and bus segment is over

60%. Envisioning the need for products to cater to changing
freight & passenger movement patters on superior vehicles
running on the fast improving road infrastructure, JK Tyre
pioneered the introduction of truck and bus all steel Radial
tyres in India for the first time. The company has deployed
significant resources in the developing the market and

educating the customer on the value proposition of truck and

bus radial tyres. Backed by an all India service network along
the national highways, JK Tyre is all set to drive yet another
radial revolution in the country.

Hari Shankar Singhania Elastomer and Tyre Research Institute

(HASETRI) is our in-house R&D center and is one of its kind in
Asia.

Today

HASETRI

act

as

nerve

center

understand/determine consumer needs, develop and provide

suitable

products

of

world-class

quality

to

the

Indian

consumer as well as continuously gauge their performance.

This facility is involved in various collaboration projects with
leading research agencies both in India and abroad. HASETRI
is presently engaged in FEA and NDT studies with IIT
Chennai, Elastomer studies with IIT Kharagpur and partnering
IIT Delhi in the study of textiles. The internationally acclaimed
Smithers in USA is also working with HASETRI in the field of
VDD and Tyre Mechanics.
Who are other major players in the tyre Industry, apart
from JK Tyres? What is the share of your company in the
total market share?
Apart from JK Tyre, MRF, Bridgestone, Apollo & TVS can be
categorized as other dominant players in Indian Tyre industry,
others being Goodyear and Birla. Put together they represent
around 75-80% of the Indian tyre industry.
JK Tyre V/s Competition Shares of Total 4 Wheeler Tyres
Company

Share

Company

Share

JK Tyre

20.9%

TVS

15.9

MRF

22.3%

Goodyear

9.5%

Apollo

17.4%

Birla

5.6%

Bridgestone

8.5%

Source: ATMA (All 4 Wheeler Tyres) 2002-03 April - March

Who are the major user-segments and what is Companys
market share in each user segment. (CVs, Car &Utility
Vehicles and Farm & 2-3 wheelers)?
One can categorize the major user segments in 4 wheeler tyres
as Commercial Segment i.e Truck, Bus and LCV, Passenger
Car Segment i.e Cars, MUVs, Jeep and Farm Segment i.e.
Tractor and ADV.
JK Tyre V/s First Top 3 Players Share Truck & Bus Segment
JK Tyre

Apollo

MRF

25.2% 24.8% 18.8%

Source: ATMA (All 4 Wheeler Tyres) 2002-03 April - March
JK Tyre V/s First Top 3 Players Share Passenger Line Segment
JK Tyre Bridgestone MRF
18.2% 15.4%
24.7%
Source: ATMA (All 4 Wheeler Tyres) 2002-03 April - March
In terms of revenues, which segment is performing
better? Which segment is likely to drive the growth of
Tyre Industry?

In term of revenue Truck and Bus segment contributes the

maximum around 70%.
Further according to me, growth in commercial vehicle &
passenger car segment, production and sales, will boost up the
demand and thereby continue to drive the growth of tyre
industry.
The infrastructure initiatives like Golden Quadrilateral and NESW corridor, expressways will further drive the Radial revolution
in India, be it Truck & Bus Radial or Passenger car radials.

For JK Tyre the world is the stage, accordingly, it has forged long
term business partnerships with overseas players. We have
established a significant presence in China by way of outsourcing
arrangements as well as participation on manufacturing as
technology

partners.

Today

heavy-duty

bias

tyres

are

manufactured with our Technology and JK Tyre Branding and are

being successfully marketed in the Chinese and other global
markets.
Today, we export tyres to 60 countries across 6 continents and
enjoy premium brand status in highly competitive markets like
the US. For being the largest exporter of tyres from the country,
JK Tyre has been awarded with Top Export Award CAPEXIL in
year FY03. We have generated revenue of Rs3.1bn (FY03) from
our export operations.
The turnover from Chinese operations will be of significant
contribution in the years to come. We expect to have an
estimated turnover of around Rs4bn in next few years.

What top line and bottom line growth figures are you
expecting for the coming years?

We at JK Tyre are looking for a turnover in excess of Rs50bn

by

FY06

and

expected

to

improve

our

bottom-line

substantially in the years to come. We aim, to be leaders in

the entire range of radial tyres (Truck & Bus, LCV, Passenger
Car, Jeep & Tractor), we operate in.
Could you brief us about merger with Vikrant Tyres and
synergy seen in terms of change in capital structure,
production capacity, sales and realizations per unit?
JK Industries Ltd has metamorphosed into a mega tyre entity
with the merger of Vikrant Tyres Ltd and crossed the magic
turnover figure of Rs20bn in FY03. We are on the threshold of a
new era with JK Tyre consolidating leadership status as well
embarking on the path of enhancing our global presence.
Derived Benefits

Benefits of synergy of over Rs220mn/annum accruing to

one

entity, JK

Industries,

earlier

it

was

shared

by

shareholders of respective companies. The benefits have

been realized in the areas of bulk raw material purchases,
logistics and rationalization of network & sales force.

Combined capacity of tyre stands increased from 3.5mn

tyres/annum to 5.6mn tyres/annum.

The

capital

of

the

company

stands

revised

Rs345.6mn to Rs374.6mn as on September30, 2003.

from

Earning

Per

Share

of

the

restructured

entity

has

substantially increased and the market price of the share,

which was Rs20-25 per share before the restructuring, is
now being traded at significantly higher prices of over
Rs75/share.

Technology & R&D

Full Range of products

Focused and targeted marketed segmentation

Common strengths of both the brands to be leveraged

Can you brief us about your regional presence? What are

the Companys plans in order to expand and maximize its
geographical reach?

Today

we

are

exporting

to

60

countries

across

continents. We have a significant presence in Middle East

and a strong presence is South-East Asia, including China,
where in we have strategic alliances for both outsourcing
as well as sale of JK Branded tyres in Chinese markets.

W.r.t. expanding and maximizing our geographical reach,

though, we are the largest exporter from India into
Americas & Australia, we are in the process of further
developing these markets to cater to the still untapped
potential.

Anything which you like to share with us?

JK Tyre is the first to introduce Truck & Bus Radials in India

is 6 years ahead of the next likely entrant

Selling 0.2mn tyres per annum

Exporting Truck Radial Tyres worth Rs1bn

It has always been the endeavor of your company to make

JK Tyre as Indias most preferred brand. It is a matter of
great pride that JK Tyre is Indias first & only tyre
brand to get the coveted "Super Brand" status and to
feature in the prestigious Super Brands Publication. This is
yet another first ever for any Indian Tyre manufacturer and
is a unique recognition of JK Tyres unassailable position as
Indias top tyre brand in quality and image perception.

Further recognition accorded by the worlds top customer

satisfaction survey agency JD Power, which has
recognized JK Tyre as the "Most Improved Tyre Brand"
in India.

FUTURE SCOPE OF TVS TYRES

Demand for tyres is derived from demand for automobiles.

Therefore it is a derived demand product and its fortunes are
very closely linked to those of the auto segment. Within the tyre
industry the trucks and buses (T&B) segment accounts for more
than 70% of sales. Though scooters and motorcycle tyre demand
also plays a vital role, in value terms, CVs gain significance.

Tyre varieties can be divided into two categories cross ply and
radial. The domestic industry is dominated by cross-ply tyres,
due to the poor conditions of roads in the country and
overloading of CVs. This is also the reason why penetration of
radial tyres in the CV segment is negligible and finds presence
only in the passenger car segment. On the other hand, radial
tyres

dominate

western

markets.

Radial

tyres

can

be

differentiated on the type of belt used fiberglass, steel and

nylon. Worldwide, steel belted radials are more popular due to
their performance advantage.
There are three major consumer segments for tyres namely
replacement segment, Original Equipment Manufacturers (OEMs)
and exports. Though fortunes of the sector are closely tied with

the automobile industry, replacement demand continues to

remain the key growth driver. Replacement demand accounts for
as high as 57% of industry volumes. However, the contribution
from

OEM

and

replacement

segments

varies

across

sub-

segments in the auto sector. For instance, for the passenger car
segment, demand is balanced from replacement and OEM
categories i.e. 50:50.
Another key transition that is taking place in the industry is the
entry of multinationals like Good Year, Bridgestone and Michelin
in the domestic market. MNC tyre makers have cornered a
higher market share in India in the last three years due to their
international relationships apart from superior technology. Since
Honda, Hyundai and Toyota have an international sourcing
agreement with Bridgestone, it is also the preferred supplier in
India. Goodyear is believed to be the preferred supplier for Ford
India.
An extensive distribution network and strong brand recall are
factors critical to tyre sales. Brand building is given a lot of
importance by manufacturers, who allot 2-3% of sales to
advertising.

With

the

introduction

of

radial

tyres,

even

technology has assumed significance. All foreign cars introduced

in the country are on radial tyres.
Raw materials constitute 60%-70% of production cost of tyres.
Natural rubber and Nylon cord fabrics are the most critical raw
materials as it accounts for 50% of total raw material cost. Since

most of the raw materials are crude derivatives, a rise in prices

has a negative impact on margins.

The export market holds tremendous potential for domestic

manufacturers.

Tyre

exports

have

grown

at

an

annual

compounded rate of 27% over the past 10 years. Indian tyres

are exported to 56 countries, which are primarily developing
countries.

NEW LAUNCHES OF TVS TYRES

TVS slashes prices of truck, bus tyres

TVS-Kelani Associated Holdings (Pvt) Ltd., the leading tyre

manufacturer in Sri Lanka has announced a major reduction in
the

retail

prices

of

lighttruck,

truck

and

bus

tyres.

"Effective December 10, 2001 this reduction would make TVS

the most affordable tyre when compared to all international
brands sold in the local market, the company's General Manager
(Sales & Marketing) Ashwin Padukone said.
"In a market battered by the economic downturn, the ability of
the customer to buy new tyres at the correct time has dwindled.
As a result many vehicles are seen on the road with bald tyres,
which seriously jeopardises the safety of the customers and their
vehicles." Mr. Padukone said - "Using new tyres on the front
wheel, has been established as the safest and the recommended
option for safety reasons. We anticipate that this price reduction
will encourage consumers to replace with new tyres at the right
time," he said.
The anticipated benefit of the increase in offtake and the
consequent capacity utilization, has been factored into the price
reduction and has been passed onto the consumers, Mr.
Padukone added. TVS-Kelani Associated Holdings (Pvt) Ltd., a
joint venture company established in 1999, represents the
strategic alliance between Kelani Tyres Ltd., AMW Group, NDB
and

TVS

Ltd.

of

India.

The

holding

company

has

two

manufacturing arms, one in Kalutara and the other at Kelaniya.

COLLABORATIONS

A high percentage of fibre glass produced in the world is used

for re inforcement of plastics The main products maiketed by the
fibre glass plants are Mats, Rovings, Woven Rovings, Yarns etc.
The use of end products i.e. fibre glass reinforced plastics are
mostly in pipes and tanks, boats transport sector, furniture,
crash helmets etc

The formulation chosen for continuous fibre

glass production is generally known as E-glass. This has become

standard the world over as it performs well in practice and is
used widely. The fibre glass produced in India is Eglass only. The
process of manufacture of fibre glass consists of several steps
e.g. batch preparation, production of glass melt, glass filament
conditioning, winding, drying of glass cakes, conversion to
saleable products.
In late seventies, the background of the licensing policy was to
issue a large number of letters of intent with a capacity of 2000
Tonnes per annum expandable to 4000 tonnes per annum
capacity. At that time only one unit Fibre Glass RlWngton (FGP)
was working at Thane-Bombay with a licensed capacity of 1290
tonnes per annum. Out of 6 letters of intent issued, only 2 units
i.e. Deccan Fibre Glass Ltd, (now known as Glass Fibre Division,
TVS Tyres) and UP Twiga Fibre Glass Limited (now closed since
December 1982) were installed in early eighties. The other units
did not materialise mainly due to inadequate market demand
The present guideline of licensing is that no new licence is to be
issued till 1990, since the installed capacity in the country is
around 5000 tonnes per annum against the present demand of
2400 tonnes per annum.

FGP Ltd, started production in mid sixties with remelt

technology based on imported E-glass marbles. In 1974 they
started their own unit melter for manufacture of E-glass with a
licensed melting capacity of 1290 tonnes per annum #nd the
installed finishing equipment capacity of 2650 tonnes per
annum. The company is functioning with about 70 to 80 per cent
of their licensed capacity.
UP TWIGA Fibre Glass Ltd, was started in 1980 at Sikandrabad
in Ottar Pradesh. The capacity of the plant is 2000 tonnes per
annum with electric Pochet Furnace. The unit could not develop
proper market for its products.
The unit, had to close down in December 1982 and has not
restarted as yet Deccan Fibre Glass Ltd, came into being in 1981
at Ntehboobnagar in Andhra Pradesh. In 1983 the unit was
merged with TVS Tyres Ltd, and is presently known as Glass
Fibre Division, TVS Tyres Ltd, The installed capacity is 1770
tonnes per annum with electric Pochet Furnace. The per
formance of the unit is not satisfactory and the production varies
between 40 to 50 per cent of licensed capacity. The main reason
for dismal capacity utilization is inadequate market demand.
1.1.7. AW the three fibre glass units were put up with foreign
collaboration. The collaboration agreements were more or less
similar, irrespective of the
country of collaboration. The major scope of collaboration was:
a) Provision of technology
b) Basic engineering of the plant

c) Detailed engineering and design of special equipment and

supply of
materials
d) Procurement and supply of special equipment
e) Commissioning and Supervisory services.
f) Arrangement of training of personnel in collaborator's place

SWOT ANALYSIS

Strengths

Weaknesses

Right products, quality and

reliability.

Superior product performance vs.

competitors.

Not very popular in the international

market

Brand Image

Delivery-staff need training.

Products have required

accreditations.

Customer service staff need training.

Processes and systems, etc

High degree of customer satisfaction.

Management cover insufficient.

Opportunities

Profit margins will be good.

Could extend to overseas.

Could seek better supplier deals.

An applied research centre to create

opportunities
for
developing
techniques to provide added-value
services

Threats

Vulnerable to reactive attack by

major competitors.

Lack of infrastructure in rural areas

could constrain investment.

High volume/low cost market is

intensely competitive.

QUESTIONNAIRE

Excerpts from the interview:

How do you see 2002-03 shaping up?

The year so far has been good for the industry. All the tyre
companies had good results in Q1, we too. In Q2 also, that
trend continued - Apollo was the most impressive and
compared to the previous similar period TVS was also
impressive. Now at end-Q3, I am noticing a mild depression
in demand. I don't know the reason - December demand is
always a little low, but then this year even October-November
demand saw a mild fall.

It could be due to some after-effect of poor rains. But Q3 is a

period of high tyre production. Therefore, there is a little
extra-supply in the market at present. Companies are now
trying to export more to take care of this problem.

But is not the global automobile market sluggish?

I am talking of trucks and LCVs. I won't say the market

worldwide is down. In fact, January-December last year most
tyre companies posted good results. But yes, the kind of
growth that was expected did not happen. However due to
the 9/11 attack in the US, crude oil prices fell and when that
happens everything else falls - synthetic rubbers, caprolactum
- all went down by 20, 30 or 40 per cent.

The result was that even if the demand was low, it did not
matter due to bigger gains on raw material costs. If good
things happen for bad reasons, nobody talks of it! Until June
this year, the situation was good because crude recovered but
did not go above $23-24. Later, owing to issues like tension in
the Middle East, crude flared up, touching $30-31. I have not
seen a scenario, where within nine months you see crude at
$17 and $31. Almost 80 per cent up! If your main raw
material swings by 80 per cent, its derivatives also swing. At
this point in time, raw material cost is another issue facing
the industry. It is a substantial increase.

So, Q4 and into next year, it is a dicey market one is

looking at...

Q3 demand is more or less the same as Q2. It is seasonally a

little weaker than Q2. But in this particular quarter, I think
there will be some pressure on margins. In Q4, at least for
the first two months, the pressure will be even more due to
all the increases that started coming in from July/September their real effect comes a few months later.

Two or three situations are likely. The tyre industry may be

able to pass on the price increase. Can't say whether it will
happen or not because there are now four major players and
there is quite a fight going on in the market place. There is
the possibility that in the Budget, the import duty on raw
materials will come down again - could be a five per cent
decline.

There is also a feeling that by February/March the tension in

the Middle East may settle down a bit, so you could see crude
prices stabilising at $22-24. If so, raw material prices will fall.
Besides, the rupee has not depreciated against the dollar; it
has somewhat appreciated. Thereafter the industry may be
on a stronger footing.

What could be the impact on the domestic tyre industry,

of the rounds of consolidation beginning to happen?

The market in India is worth about Rs 10,000 crore. It is in

the hands of four big players, two medium players and few
small players. The big four - and here I am assuming Vikrant
and JK are merged - are likely to have a 2002-03 turnover of
Rs 8,000 crore. The two medium players - Goodyear and Birla
- should account for Rs 1,000-1,200 crore. The rest should
notch up another Rs 1,000 crore. About 15 years ago, we
were 12 big players. But in my opinion, we will see further
consolidation and nobody should be under the illusion that he
is big enough to be not gobbled up. I would expect in the next
two years, the number of players from four plus two, to be
reduced by at least one. One more player should get out of
business in the next two years and every two years you
should see a player getting out. Ultimately, it will be a
business of just four players.

I am not necessarily saying that the medium ones will go,

because Goodyear will not - they have taken a decision to
remain in the business. They may lose money, but they will

stick around, they have deep pockets. Out of the other five,
one or two will be gobbled up over the next five years. The
strategy has to be - first you take adequate steps to ensure
you are not gobbled up. Second, you must have a topline
whereby you get 20 per cent of the business. So, if you have
a market size of Rs 10,000 crore, the minimum critical mass
is Rs 2,000 crore. If you don't reach that, the chances of your
going out of business are high.

Worldwide the industry is highly consolidated. It is a $70billion market and ours is $2 billion. All Indian players rank
between 10 and 20 globally. The top three worldwide are in
the range of $12-13 billion, the biggest among us is MRF,
about half a billion dollars. If you go to the middle level - like
Continental, Pirelli or Yokohama - they are about $2-2.5
billion. So, we are still one-fifth the size of medium players
globally. But on the other hand, if you reach $1 billion, you
will be in the top 10.

So what is TVS's strategy here?

Strategy won't be any different for TVS. For all, it hinges on

three factors - topline, then technology - it changes every 4-5
years

and

most

Indian

players

are

not

prepared

for

technology changes. They will have to look for outside help in

the form of collaboration or partnership.

Modernisation and minimum critical mass is the other factor.

If you try to do some of these things early - like we tried to
set up a radial plant in league with Goodyear long time back

but were doing it ahead of time - we lost heavily as a result

and had to pull out of the joint venture.

Likewise, everyone is thinking when to get into radials; but

when India will radialise is a million dollar question.

JK is attempting it, they have a radial facility in Vikrant; but

they are unable to utilise that capacity. They have I think
20,000 plus capacity, but are able to sell around 3,000 in
India. Apollo has announced they will put up a pilot radial
facility in Vadodara and they will come up with production
early next year.

All this is very nice to hear. If you go deep, you won't find
clear answers from any company because it depends a lot on
Government policy, how infrastructure comes up. If roads are
not good, radials won't come.

Are you looking for a technology partner?

I think everybody is! I won't say we are looking for a partner;

we are looking for an association. It is clear for JK, Modi and
Apollo because they have a collaborator.

But in the case of MRF and TVS, there is no clear signal

because we don't have a technology partner today. I am sure
over time both of us will figure out who can be our technology
partner.

Does a technology partner imply an equity partnership?

Most of the tyre companies abroad are not well placed for
equity participation. Bridgestone lost a lot of money in the US
after which they are not keen to set up plants.

Michelin does not operate in partnerships, they like 100 per

cent ownership or majority ownership with the rest held by
the public. They don't like to have a big local partner
anywhere. The European economy has not done well, so the
earnings of European tyre companies are down and they are
not keen to invest.

The weakness with Indian companies is technology. But they

are wary of joint ventures or partnerships.

On the other hand, retained earnings at our tyre companies is

poor, Rs 10-20 crore a year. You can't get technology for that
price! So, it is not a simple jigsaw puzzle to be fixed.

TVS plans to set up Rs 250-cr truck radial unit

Our Bureau
CHENNAI, June 9
TVS Ltd plans to invest Rs 250 crore to set up a unit to
manufacture radial tyres for trucks, according to Mr Kalyan K.
Paul, Vice-President, Sales and Marketing, TVS Ltd. He said that
the unit would have the capacity to manufacture 50,000 to
60,000 tyres per month.

Mr Paul said that internationally the market was moving

towards radials and the company expected the Indian market
would also grow in that direction, especially with the proposed
investment into the road sector, which was expected to bring
in better roads. The company has imported radial truck tyres
from China to test the market, with the first consignment of
300 to 350 tyres coming in two months ago. The company
manufactures radials for passenger cars and this capacity is
expected to be ramped up from 35,000 to one lakh tyres per
month. The investment in the expansion is around Rs 75
crore to Rs 80 crore in the current year, Mr Paul said.

In the two and three-wheeler segment, the company, which

has followed a policy of outsourcing, has increased production
capacity from 60,000 to five lakh tyres per month, he said.
The company has chalked out an aggressive sales strategy to
increase market share and planned to tie up with leading
original equipment manufacturers. It also plans to increase its
imports from the Sri Lankan unit. At present, the imports
from Sri Lanka account for almost 5 per cent of the turnover.

TVS plans to spend Rs 15 crore on advertising this year, Mr

Paul said. He said that the company is also actively getting
into building relationships with the transporters and is
spending Rs 1 crore on AIDS awareness and other lifestyle
issues which are centric to this sector. This campaign is
expected to cover almost all the transport hubs in the
country, Mr Paul said.

TVS Limited continued on its turnaround plan by registering a

PBT of Rs. 9 crore and Operating Profit (PBIDT) of Rs.27.3 crore
(up 58 percent) during the First Quarter ended 30th June 2002.
The sales of the companys products grew by 9.7% to Rs. 352
crore as against Rs. 321 crore for the corresponding quarter last
year
Announcing

the

Q1

Results,

Mr.

Paras

K.

Chowdhary,

Managing Director, TVS Limited said, "These results are a

confirmation of the turnaround of our company, which
has been brought about by the TVS team through greater
customer focus and increased operational efficiencies.
TVS is targeting to become a Rs. 1500 crore business this
year. We will achieve this
Improves Market Share in Truck & LCV (Light Commercial
Vehicles) Tyres
Truck tyres constitute the largest segment in the Indian tyre
market. Maximum growth has been recorded by the company in
this segment, where several new products were launched to
increase the market share to 17%, up from 13% last year. In the
LCV tyre segment, TVSs market share increased to 18%, up
from 13% last year.
To meet the growing demand, the company has also started
outsourcing Truck tyres from its subsidiary company in Srilanka,
TVS Kelani and from TCIL (Tyre Corporation of India Limited),
Kolkatta. Combined with TVSs own capacities, this would help in

further improvement in the market share in the large Truck Tyre

segment.

To strengthen in Two - Three Wheeler Tyres

TVS is aiming at doubling its market share in the rapidly

growing two wheeler segment, over the next twelve months.
To achieve this, TVS has started outsourcing its products in
this segment from two new modern manufacturing facilities at
Hyderabad and Vadodara. The product range is also being
geared up to meet the rapidly growing demand for motorcycle tyres. The Hyderabad facility has already started
manufacturing motor-cycle tyres, while the Vadodara facility
is expected to be operational by the last quarter of the
current financial year.

TVS Limited is a major player in the Indian Tyre market. It is

present in all segments of the tyre market. It has ISO 9000
approved manufacturing facilities at Mumbai and Nashik. It
employs nearly 4800 employees. TVS is a part of the Rs.6700
crore RPG Enterprises, amongst the leading industrial groups
in India.

Bibliography
SL. NO.

BOOKS

1.
KOTLER

Marketing Management

2.
RASTOGI

Marketing Management

AUTHOR
PHILIP

Dr.PANDAY