The automobile sector which has seen remarkable growth in the past year, due to the exponential demand is in expansion mode. While at the same time tyre manufacturers are not lagging far behind, they are having a whole platter in front of them and are doing their utmost to make optimum use of this.
The Economic Times, a business daily reported that Indian tyre manufacturer JK tyres Ltd, is embarking on the expansion journey for its Mysore manufacturing facility and an upcoming project near the city of Chennai. The project near Chennai is expected to be completed by this financial year which would be instrumental in JK tyres quest to corner 20 percent market share. An initial investment to the tune of Rs 950 crores is earmarked for the facilities at Chennai and Mysore. This investment is billed to provide the company means to chase a better part of the market share with the ability to produce more and also would help them in consolidating business.
According to statement coming out of the company it was notified that the Mysore expansion plan will increase the capacity of the plant by 25 percent, and it will be able to produce 10 lakh tyres per annum as against to current levels of 8 lakh units per annum. The expansion is expected to be completed by the month of May-June 2011. As far as the Chennai plant is concerned, it is been build with a production target of 4 lakh tyres per annum, and is expected to go online by the end of this year.
JK tyres are also contemplating at increasing their retail presence at the market place. The company has announced the launch of 10 exclusive JK tyres store by March 2011 and is mulling to add 20 more in the next year. These exclusively developed stores will be highly sophisticated tyre care centres, catering mainly to the truckers. This is in lieu of the latest market research which concluded that there is demand for such service in the market.
The company registered a sluggish sales figure in the commercial vehicle segment; this was attributed to the trucker’s unwillingness to buy in the year’s last quarter. The company is hopeful that the situation will be much pleasant in the first half of the year 2011, which will witness a boost in sales.
A recent report has ascertained that the growth of the domestic tyre market is a decent 10 per cent and a has certainly got more room to expand. At present JK tyres has a market pie to the tune of 18-19 percent, which it expects to accelerate and move beyond the 20 percent mark, with the latest augmentation in capacity building.