Interview with P Vijayaraghavan

TVS Srichakra’s director speaks to Shobha Mathur on the company’s product portfolio, industry performance and plans to launch its first motorcycle radials in the aftermarket. 

What are the new launches planned for the year?Two months ago, at Hanover in Germany, we launched our first tractor radial tyre, and plan a global rollout over the next two years. Our focus in India remains on tubeless tyres for all the new models of motorcycles such as 250cc bikes. Last year saw the launch of 10-12 TVS tyres in the aftermarket; more sizes of tubeless tyres will be launched in future. 

Today in India most of the two-wheeler OEMs are manufacturing higher capacity bikes in the 200-300 cc range and for that we are producing tubeless tyres. However, by end-2014 we will enter radial motorcycle tyres for higher-displacement bikes.

What is your assessment of the radial market for two-wheelers in India at present?
At present, Yamaha is the only two-wheeler company with one motorcycle offering radials while all other players are using tubeless tyres. The potential for radials is small in terms of volumes; it will take a couple of years to get the higher-engine capacity bikes into the country as these bikes mainly use radials. OEs like Harley-Davidson are selling higher-capacity bikes but their numbers are small.
So radialisation in the motorcycle tyre segment may not show a great growth. The advantages of radials is higher load-carrying capacity, better speed and driveability. Our radials are currently under development. We will first launch in the aftermarket by year-end and then explore opportunities with OEMs, provided they develop bikes suitable for those tyres.
At present, mostly 250cc bikes use radials. If Harley brings its larger bikes to India and assembles them locally, then we should be ready for them if they opt for TVS Tyres as a tyre supplier. Currently, MRF makes radials in very small volumes for Yamaha. But higher-displacement engine bikes riding on radials will become the preferred motorcycles in the years to come. TVS and BMW Motorrad have also signed a collaboration for higher-engine capacity motorcycles so there is an opportunity there, though we have not been approached.

How is the tyre industry faring during the slowdown?
Quite well, actually. All the tyre manufacturers have turned out a fairly decent performance in terms of the bottom line despite passenger cars and commercial vehicles not faring well. The aftermarket has done better than the OE side. On the raw materials front, rubber prices have softened and that is helping us but carbon black, carbon-based materials and synthetic rubbers are going up. So we have to balance out.

Can you give an update about your global plans?
While we are a two- and three-wheeler tyre company in local markets, we make off-road tyres, forklift and pneumatic tyres, multi-purpose tyres and agricultural tyres for export markets. Exports were about Rs 200 crore last year to 80 countries. The target this year is in the Rs 220 crore range.
The domestic market accounts for the chunk of the revenues of Rs 1,500 crore, both from OEM and aftermarket segments. Exports primarily target aftermarkets. We supply to distributors in each country who in turn supply to the aftermarket, with a small portion going to OEMs.

How do you expect to grow during 2013-14?
We are expecting 10-12 percent YoY growth in 2013-14 and propose to add more customers in export markets as we are adding tractor radials to our product basket. We are, however, bullish of achieving 15 percent growth in 2014-15.

How has TVS Tyres evolved since inception?
We started production in 1985 and have consciously remained as a two- and three-wheeler tyre company producing 1.7 million tyres a month with our parent plant at Madurai. Our second unit at Rudrapur in Uttarakhand began operations three years ago.
In terms of tyres, tubeless tyres are still something novel, starting with passenger cars and now coming into the scooter and motorcycle segment. We have done a lot of R&D in tubeless tyres with this segment of tyres contributing about 500,000-600,000 units every month out of our total production both for OEs and the aftermarket. Four months ago, we launched tubeless tyres for bikes in India.
In the aftermarket, we are still below MRF but are growing steadily. We have a 3,000-strong dealer force and, as a company that is young, are reaching out to the semi-urban and rural areas. Both motorcycles and scooters are increasing in popularity in semi-urban and rural areas and so we undertake several initiatives like consumer campaigns, mechanic meets and dealer meets often joining hands with OEMs in their campaigns to raise product awareness.