CEAT, which gets counted amongst the largest tyre manufacturers in India by revenue, is looking to further increase its penetration in India’s smaller cities and towns by opening at least 100 specially formulated stores in the next couple of years.
An investment of around Rs 20-25 crore has been earmarked for the initiative which the management expects will help in shoring up the company's revenue from exclusive stores by around 15 percent. The company did not specify the revenues which it earned from its exclusive channels. Ceat’s overall revenue in FY2020 stood at Rs 6,778 crore.
Christened CEAT Tyre Stop, the franchise offering is being targeted at Tier 2 and 3 cities and towns, having populations in the range between 100,000-300,000. It will cater to buyers in the two-wheeler and car segments. An important feature of Tyre Stop stores is that all its major elements will be powered by solar energy, the company highlighted.
Tyre Stop stores are different from the CEAT Shoppe, another retail store chain which is targeted at metros and bigger cities. In addition, Shop-in-Shop (SIS) has multi-brand tyre outlet stores across the country. For the commercial segment (Truck/Bus bias and radial tyres), the company has a different format named Truck Service Hub (TSH).
Commenting on the development Arnab Banerjee, COO, CEAT Tyres said: “We have increased our reach and are now available across town classes and are increasing reach by mapping villages using GIS (geographical information system) – probably the first in the tyre industry. Several other projects in order to penetrate far-flung and small markets have been taken to ensure we allow consumers down the population strata to buy and use our product easily”.
The company plans to expand its overall retail footprint to 600 exclusive brand outlets in the next 2 years (through the CEAT Shoppe and Tyre Stop network).
As per industry experts, the demand for domestic tyres remains robust driven by a spate of factors including import restrictions announced by the government , strong rural sentiment, shift towards personal mobility and increase in fleet utilisation in recent months. While CEAT continues to remain focussed on its relations with OEMs , the period during March-June, considered to be historically strong season for replacement demand, remains buoyant.
CEAT has in recent months made entries in new models including the Hero Splendor iSmart HF Deluxe, Hero Dare 125, Duet E, Maruti Alto VXI+, Hero Glamour, Mahindra Jeeto Z Series, Tata Intra, Mahindra Perak, Mahindra Thar and Nissan Magnite.