‘We are targeting the SUV, higher-end cars and the truck and bus radial markets as new growth areas.’

Vikram Malhotra, JK Tyre’s marketing director, reveals the game-plan for expanding the car and truck tyre sales network. An interview by Shobha Mathur.

You have opened a new Steel Wheels showroom in Noida today. What is JK Tyre’s strategy to drive sales in 2014-15?
As regards exclusive showrooms, we have 120 Steel Wheels outlets and expect to open 50 more this year. At present, nearly 35 percent of our sales take place in these outlets. We want to increase our presence in this area because you get a better foothold with exclusive shops. The remaining sales come from the aftermarket where we have multi-brand dealers, many of whom deal with all tyre companies.
Our services in one State are comparable to the other; we have a consistent, standardised service and importantly tyres and tubes are original. We also have very modern wheel alignment and balancing systems and nitrogen filling facilities, all of which go a long way in improving tyre life and thereby bring down the cost for the customer. Also, with high-speed driving, especially on the Delhi-Agra route, we can explain to customers the highlights of different tyres for different applications and also counsel them on how to look after their tyres.

Where will the 50 new Steel Wheel showrooms come up?
They are all across India and will soon open in Chennai, Mumbai, Meerut and B and C category towns which are growing at a hectic pace. In these places, branded shops play an even larger role as people prefer to visit them. Growth in these towns is much faster than in cities and the customer is looking at service and is more trusting of a company-branded showroom.

What is the roadmap for expanding the multi-brand dealer network?
We are expanding the dealer network and getting into B and C category towns and the hinterland. The growth is there and the slowdown was not felt in these smaller towns. Secondly, we are doing a lot of branding exercises like our integrated brand campaign to position the brand as a premium brand. Last year, we had four all-India launches where we launched 10 products of which 3-4 products were for the passenger car category.
As regards passenger cars, we will soon be launching a slew of new products to meet demand as customers seek new designs, new products and new features. We expect a lot of new business to come from new products.

Which segment of the market will you focus for the new products?
We are looking at SUVs, higher-end cars, and the truck and bus radial segment which is really a growing area. We will be launching a few sizes here. We have a leadership position to maintain and we will bring in a lot of new products.
Also, in truck radials which are really catching up, we have a good product range and, like the Steel Wheels outlets, we have Truck Wheels. We have 13 Truck Wheel showrooms and should be adding at least 10 more by the end of this fiscal. These showrooms offer tyre alignment, balancing and nitrogen filling facilities as also buyback services. The truck customer is looking at bringing down his cost per kilometre.
Last year we added at least 500 new dealers and this year we will add about 600-700 multi-brand dealers apart from the 50 Steel Wheel outlets. They are for the entire range of tyres.

What are the new products in the pipeline?
We should come out with 8-10 new products category-wise in all segments put together. The maximum range will be for car radials for the aftermarket. For OEs, we develop different products for the launch of a new vehicle that takes almost 1.5-2 years. Development is an ongoing process and these tyres specifically meet the OE requirement.

What is the current aftermarket contribution?
The aftermarket contributes about 75 percent with OEs chipping in with around 22 percent. The value is more for truck radials because each one costs around Rs 19,000 while an average car radial would be between Rs 4,000-5,000. The value of the truck is more but as the years go by the value of non-trucks in the replacement market is created substantially every year with new cars and SUVs coming every year.

Passenger car and SUV sales were down for the past couple of years. How how far was tyre production and sale affected?
We have not come down but instead have seen growth. We feel that in the OE segment, sales of trucks and buses have already started showing a pickup and for passenger cars June was a good month. From September-October, there will surely be a turnaround in the OE segment and also in the aftermarket with the kind of money the government is spending on road development and infrastructure as also on opening of mines in October. So we are quite bullish about the year ahead.

How do you see the potential of radialisation in trucks and buses?
At present it is 27 percent but by 2016-17 it should go up to nearly 60 percent. It is growing very fast and the OEs are radialising too, the replacement market is nearly 23 percent but OE is nearly 50 percent-plus so radialisation is here to stay.

What training do you provide to personnel working in Steel Wheels and Truck Wheels showrooms?
We have our internal faculty that trains repeatedly on hard skills and soft skills. Hard skills involves wheel alignment and balancing, mechanics and also understanding the basics of a tyre while soft skills are all about how to engage a customer because customers have become very demanding today. They require a lot of attention and at Steel Wheels customers can use the touch-screen to navigate and understand the right product for his/her car and make an informed choice.
Apart from training, we also ensure the consumer buys the product best suited for his/her application. All Steel Wheels outlets are one-stop shops wherein all solutions are provided at one outlet be it a set of new tyres, wheel alignment, filling of air or queries to be answered.

Can you throw some light on your rural customers?
Basically the rural and urban customer is the same, the difference is in the communication. We train our Steel Wheels staff on how to talk to the consumer in his language and understand the same concept because finally it is communication and understanding that does the job. In fact, all our van campaigns and tractor campaigns have a local flavour and speak the local language to the customer. While we are a global company and have global technology, our heritage is Indian and we talk to the customer in his/her language.