FOCUS MAINLY ON THIS DOCUMENT FOR ANALYSIS

_______________________ Tyre Maharajahs Case Study _______________________

TYRE MAHARAJAHS AGAINST CHINESE EXPORTERS

AND TYRE GLOBAL MAKERS.
THE STRUGGLE FOR LEADERSHIP IN THE INDIAN TYRE INDUSTRY
The Tyre Industry in India: Growth, Trends and Technologies
“The Indian tyre industry is emerging as a
force to reckon within the global tyre
manufacturing ecosystem […]. The industry
has undergone a metamorphosis of sorts in
the last few years and has received global
recognition too […]. As a fast developing
nation, being the fastest growing economy in
the world, India offers immense potential for
the growth of the tyre industry”(Anant
Goenka’s interview, CEO of CEAT and
Chairman of the Indian Automotive Tyre
Manufacturers’ Association - ATMA)1.
Indeed, in a 10-year period, the Indian tyre
production has increased from 80 to 180
million units; in the meantime, Indian tyre
companies have thrived investing heavily
abroad and exporting annually Rs. 100,000
million (US$ 1.5 billion). As a result, four
Indian tyre companies are ranked among the
top 30 global tyre makers by turnover2. For
the coming years, India’s GDP is predicted to
grow at a pace of 7.4%, ahead of other
emerging economies. It would surpass China
by 1% while other BRICS economies would
stick to growth rate ranging from 1 to 2%3. In
the automotive industry, the Society of
Indian Automotive Manufacturers (SIAM)
expects that the production will increase by
3.5 to 4 times from 2016 to 20264. Boosted
by this strong momentum, the tyre industry
plans on growing from Rs. 550,000 (US$ 8
billion) to 2,000,000 million (US$ 30
billion).
Although India will experience high or
hyper-growth, uncertainties and risks will
also rise in such a fast pace that tyre
companies could see their return on
investment dented and their growth thwarted.
Even for large Indian companies that have
expanded their operations abroad, they
remain greatly dependent on the Indian
market for their turnover, growth and
profitability. Their home country remains
their so-called “cash cow” market.
Among these uncertainties and risks looming
over the Indian tyre industry, we can first
highlight the variations in the raw material
prices. Tyre inputs, such as natural and
synthetic rubber and crude oil, have become
more expensive due to their cyclical price
increase, the depreciation of the Rupee and
the 25% customs duty imposed on imports by
the Indian government5. Moreover, some tyre
manufacturing facilities cannot operate at
full scale as they are short of supply due to
bad crop of natural rubber in India6.
Second, the Indian tyre industry is
confronted with tough competition from
imported Chinese tyres, which are on
average 50% cheaper than domestic
products7. The Indian government has
recurrently imposed some tariff and non-
tariff barriers to imported tyres with the aim
to reducing the attractiveness of low-cost
foreign products, such as in September 2017
and September 20188. But these measures
have only partly deterred price-sensitive
Indian customers from buying imported
products.
Third, a series of Indian government
initiatives have been launched with mixed
and unforeseeable consequences. In July
2017, the Indian government enforced a
consumption tax known as the GST (Goods
and Services Tax). This tax enforcement has

This case study was written by Dr. Alexandre Bohas (Professor at ESSCA Business School) and Dr. Pierre-Xavier
Meschi (Professor at IAE, Aix-Marseille Université). It is intended as an illustration to be used in class discussions.
The authors gratefully acknowledge Michelin’s irreplaceable cooperation in providing them complete access to world
tyre industry data. They wish to thank in particular: Thierry Anglade (Michelin’s Corporate Development & Progress
manager) and Frédéric-Patrice Vincent (Michelin’s Vice-President Strategy & Development).

_________________________________ 1 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

made it harder for low-cost imported tyres to Fourth, recent rising protectionism from the
enter the domestic market. These imported US government under the initiative of
tyres can no longer circumvent GST by President Donald Trump threatens the Indian
making cash deals. Along the same lines, the tyre industry: (i) directly, with the
demonetization regulation, which led to enforcement of anti-dumping measures
withdrawal of Rs. 500 and 1,000 bank notes, against tyre imports from emerging
has also caused a drop in massive imports by economies, including India. These measures
diminishing excessive cash in the economic represent a major threat, as the US is the first
system9. All these government measures export country for Indian tyre makers
have triggered destocking behavior from tyre (especially, for JK Tyre, the third largest tyre
dealers and garages. Besides, environmental maker in India). (ii) Indirectly, with the trade
and sustainable development concerns have war currently occurring between the US and
raised pressures to curb air pollution. Since China. This war could have adverse side
2000, Bharat Stage (BS) emission standards, effects for Indian tyre makers since a
inspired from European “Euro” regulations, decrease in Chinese tyres exports to the US
have been progressively imposed on all would mean an additional flow of discounted
motor vehicles. The BS-IV grade was Chinese tyres diverted to India.
enforced for the whole country since April
All these headwinds increase the
2017. Faced with increased air pollution, the
uncertainties and risks for the Indian tyre
Indian government has decided to skip BS-V
makers, which explain the sharp decrease in
and looked forward to implementing BS-VI
stock prices for leading players such as
in the short term10. The acceleration in
Apollo Tyres and JK Tyre (see Figure 1) and,
enforcing environmental norms comes along
to a lesser extent, MRF, in 2018.
with the increase in the price of cars and gas.

Figure 1 – Stock Market Price Variations in 2018 (in Rs., Apollo Tyres and JK Tyre)
300
=> growth rate (GDP) > booming automative
industry (high demand, high spending, 275
income level) 250
=> rising high social class in Indian (social) 225

=> the change from cross-ply to radial-ply

200
technology 175
Apollo Tyres
150
Jun-18

Aug-18

Nov-18
Oct-18
Feb-18

Apr-18
May-18

Jul-18

Sep-18
Jan-18

Mar-18

Dec-18

200
180
160
140
120
100
JK Tyre
80
Jun-18

Aug-18

Nov-18
Feb-18

May-18

Jul-18

Sep-18
Oct-18
Apr-18
Jan-18

Mar-18

Dec-18

Source: stock market prices for Apollo Tyres and JK Tyre are
available on the website: https://in.finance.yahoo.com/quote,
accessed on December 20, 2018.

_________________________________ 2 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

As regards technologies used for making
tyres, one can distinguish two types,
corresponding to the tyre body construction
and the combination of textile and metal steel
cords (see Figure 2), namely, “diagonal” or
cross-ply technology, and “radial” or radial-
ply technology. In the cross-ply technology
(created in 1950), the textile and metal steel
cords are braided diagonally on the external
surface of the tyre. In the radial technology
(patented on June 4, 1946 by Michelin), the
textile and metal steel cords are braided
radially or at 90° (see Figure 2). The radial
tyre has gradually imposed itself in
developed countries with the increased
performance of cars and trucks. With soft
sidewalls, the radial tyre has better adhesion
and greater resistance to torsion than the
cross-ply one. The imprint of the tyre is
wider and the pressure is more equally
distributed over the crowns of the tyre, which
insure better tread wear.

Figure 1 – Radial and Cross-Ply (“Diagonal”) Tyre Technologies

Source: https://otrwheel.com/otr-blog/radial-vs-bias-need-know/ (accessed on December 17, 2018).

In India, 65% of tyre sales are cross-ply (or the passenger vehicle tyre segment (see
“diagonal”). This situation is explained by Table 1).
different factors inherent to Indian road
A later-than-expected and steady process of
infrastructures and consumer behaviour,
“radialization” has taken place for a few
which can observed in most emerging
years. Road infrastructures have improved
economies: the very unequal quality of the
and cheap radial tyre imports from China
road infrastructure, the tendency to overload
have explained the switch to radial tyre, in
vehicles and the cheaper buying-in price of
particular in M&HCV tyres. In this segment,
cross-ply tyres. Moreover, in rough
between 2008 and 2018, the ratio of radial
conditions where tyre is easily punctured, the
tyres in the market has risen from 4 to 45%
cross-ply tyre can have longer life-time than
(see Table 1). Another reason is that radial
radial tyre although, by mileage’s standards,
tyres have a lower rolling resistance than
the latter lasts longer. However, cross-ply
cross-ply tyres in a country where air
tyre has poor road-holding at high speed and,
pollution has become an important concern
when it is subjected to high torsion, there are
among public authorities. Due to its
strong risks of it coming off the rim or
construction specificities, the crown and
blowing out. These various factors explain
sidewalls of radial tyres can be composed
that cross-ply tyres still represent the
differently, which brings about better
majority sales in most segments, excluding
performance in rolling-resistance.

_________________________________ 3 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

In the other tyre segments, the “radialization” two- and three-wheeler tyre segment (see
process is more contrasted. The market Table 1). This can be related to the
transformation in favor of radial technology customer’s price sensitiveness and the
is almost achieved in the passenger car tyre difference in tyre use.
segment while it has almost not started in the
Table 1 – Tyre Market “Radialization” in India
Radial tyre market share (in volume) 1995 2008 2018
Passenger vehicle 28% 95% 98%
Light commercial vehicle (LCV) 9% 12% 40%
Medium & high commercial vehicle (M&HCV) 1% 4% 45%
Two- and three-wheeler (motorcycle, scooter and “tuk-tuk”) 0% 0% 1.5%
Source: (i) Michelin in the Land of the Maharajahs (A): Note on the Tire Industry in India (Case Study, Ivey
Publishing, Ivey Business School, 9B07M030). (ii) ATMA (2017b) ATMA Review. Indian Automobile Industry,
FY2016-17 (Apr-Dec), ATMA Periodicals (http://www.mohitnarang.in/atma/wp-content/uploads/2018/03/Atma-
Periodicals_17-4-17.pdf, accessed on December 6, 2018). (iii) FY2018 Apollo Tyres’ annual reports
(https://corporate.apollotyres.com/en-in/investors/financial-reporting/, accessed on December 1, 2018).

The Tyre Industry in India: Markets and Products

New tyre distribution corresponds to three
main channels in India. First, tyres are
directly sold to carmakers through a
business-to-business channel, also known as
OEM (Original Equipment Manufacturers)
(see Figure 3). Second, the replacement
market takes place once the tyres get worn-
out or punctured. It consists of garages and
tyre dealers, including small retailers and
large distribution networks. Third, tyres
produced by the Indian tyre industry are
exported abroad. In 2018, unit sales are
broken down across these three markets as
follows: 43% for OEM market, 51% for
replacement market and 6% for export
market11. This sales breakdown is distinct
from that observed worldwide: 25-30% for
OEM market and 70-75% the replacement
market. This is specific to emerging
economies where the level of household
equipment, still low, is booming by high
growth. It is worth mentioning that
penetration of passenger vehicles is below 20
per 1,000 people in India compared to 786 in
the US12. But, in value, the market is skewed
toward the replacement segments which
account for 70% of total sales. In the coming
years, the considerable OEM distribution
channel will not only maintain but may
strengthen its position since it is nurtured by
the structural growth of customer’s original
equipment. The replacement market for the
tyre industry is much less dynamic due to
better tyre mileage and improved road
infrastructure. It is also much more uncertain
since it annually varies according to tyre
imports.
The OEM market consists of the major
Indian and non-Indian carmakers. The main
tyre buyers are presented below:
 In the passenger vehicle market,
Maruti Suzuki (Maruti Udyog group) is
India’s oldest and largest carmaker. Owned
by the Japanese Suzuki and the Indian
State, it detains a 47% share of the
passenger vehicle market13. Although it has
lost some market share since 2005 (51%), it
remains the dominant player with 1.3
million cars sold in 2016. Its closest
competitor is Hyundai whose market share
is only 17%.
 In the commercial vehicle market,
Tata Motors (Tata group) is the market
leader with a 55% market share14. It started
to build cars in 1954 in partnership with
Daimler Benz. Its closest competitor is
Ashok Leyland with a 31% market share.
While Tata Motors has balanced sales
across the commercial vehicle market,
Ashok Leyland is more focused on
commercial vehicles ranging from 12 to
16.2 tons.
 As regards two- and three-wheelers,
the segment is highly concentrated around
the following players: Hero Moto (32%),

_________________________________ 4 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________
Honda (24%), Bajaj (18%) and TVS
(14%)15. It is worth noting that these
companies have crossed the 20 million unit
sales in 201816. Among them, the Hero
Moto, formerly linked with Honda until
2010, is the world largest two-wheeler
maker.
 As regards tractors and agriculture
vehicles, OEM in India forms the world’s
largest industry in this domain. It is
dominated by Mahindra Motors with more
than a quarter of market share, TAFE
(19%), which produces and sells under its
brand name and Massey Ferguson brand,
and Swaraj (16%), part of Mahindra group
since 200717.
 Various foreign carmakers such as
Toyota, Ford and Nissan have entered the
Indian automotive industry to reach the
consumer markets but also as a basis for
export in Asia. Nissan dedicates 73% of its
vehicles manufactured in India to export;
Ford 58%. In stark contrast, the Indian
commercial vehicle industry exports 10%
of its production while 19% of passenger
vehicle production is exported.
As their major customers are heavily
concentrated in competitive segments, these
OEMs have obtained large price cuts from
suppliers such as tyre companies while these
latter have been unable to pass on higher raw
material prices, fearing market share losses.
As regards the replacement market, it
consists of thousands of independent garages
_________________________________ 5 _________________________________
and tyre dealers. Some are exclusive
(franchised or not) distributors, while others
are multi-brand. The trend is towards vertical
integration of distribution and development
of online distribution by tyre makers. This is
notably the case for JK Tyre, with the
development of “JK Tyre Steel Wheels,” and
for CEAT, with “CEAT Shoppes.” In the
replacement market, the price of tyres is a
priority purchase criterion for customers,
particularly for those who have a motorcycle,
a scooter or a three-wheeler (“tuk-tuk”).
At the other end of this capital-intensive
industry, 60 to 65% of sales are devoted on
average to raw material cost (or input cost)
whereas SG&A (sales, general &
administration) and personnel cost amounts
to 13 to 26% of sales (see Figure 5).
Nevertheless, these average input costs can
hide wide differences across Indian tyre
makers (see following section on
competitors). In addition, as illustrated in
Figure 5, the price of raw materials tends to
cyclically change according to stock
speculations, political contexts but also
economic dynamics linked to each raw
material industry. In addition to this, Indian
companies are faced with specific issues of
import tax on raw materials from the Indian
government. Consequently, the major
challenge for this industry is to reach
profitability despite the ups-and-downs of
the supply market and its dependence on
large customers.
 _______________________ Tyre Maharajahs Case Study _______________________

Figure 3 – Vehicle Production in India (2013-2018)

30

25

20
Million units

15

10

0
Passenger vehicles Commercial Three wheelers Two wheelers Grand total
vehicles

2012-13 2014-15 2017-18

Source: Society of Indian Automobiles Manufacturers (SIAM), 2018

(http://www.siamindia.com/uploads/filemanager/47AUTOMOTIVEMISSIONPLAN.pdf, accessed on December 3, 2018).

Figure 4 – Tyre Cost Structure in India

Margin and
depreciation
9-22%
Natural
rubber cost
Personnel cost 23-26%
7-14%

SG&A cost
6-12%

Synthetic
rubber cost
10-13%
Other raw
material costs
16-20% Other crude derivative
cost 16-20%

Source: Alphà Invesco, Understanding the Indian tyre industry, key players and the road ahead, 2018
(https://www.alphainvesco.com/blog/understanding-the-indian-tyre-industry/, accessed on December 16, 2018).

As Indian customers are highly price-
sensitive, they are attracted by tyres imported
at low prices from China. These imported
tyres have an average price that is 30% lower
than tyres sold by Indian companies.
Besides, some Indian companies (JK Tyre,
Apollo Tyres and CEAT) have tried to team
up with Chinese tyre makers in order to
jointly produce radial tyres and match the
lower-priced imported Chinese tyres.
Tyre exports have reached Rs. 100 million in
2017. Recording a 20% increase, the US has

_________________________________ 6 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

emerged as the biggest market for Indian companies are also present in other emerging
tyres exports. The US market has imported economies in Latin America, South-East
28 million tyres from India, accounting for Asia, the Middle East and Africa.
15% of all Indian exports18. Indian tyre
Figure 5 – Variations in Input Costs
(Brent Crude Oil, Carbon Black, Natural Rubber and Synthetic Rubber Costs)

Source: from top left to bottom right, brent crude oil, carbon black, natural rubber and synthetic rubber. (i) For
synthetic rubber, crude oil and carbon black, Federal Reserve Economic, monthly, not seasonally adjusted. (ii) For
synthetic rubber, Data index Jun 1981=100. (iii) For carbon black Dec. 1983=100. All data available on the
website: https://fred.stlouisfed.org, accessed on December 16, 2018. (iv) For natural rubber, US Dollar per
kilogram, monthly, not seasonally adjusted (www.indexmundi.com, accessed on December 16, 2018).

Figure 6 – Breakdown of Market Sales and Volume by Tyre Segment (FY2016)

VOLUME SALES

1% Others 54% Truck & bus

5% Farm Passenger vehicle

14%
5% LCV
2- and 3-wheeler
13%
13%
Truck & bus
LCV
9%
23%
Passenger vehicle
Farm
8%

54% 2- and 3-wheeler 2% Others

Source: ATMA (2017b) ATMA Review. Indian Automobile Industry, FY2016-17 (Apr-Dec), ATMA Periodicals
(http://www.mohitnarang.in/atma/wp-content/uploads/2018/03/Atma-Periodicals_17-4-17.pdf, accessed on December 6, 2018).

_________________________________ 7 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

Table 2 – Breakdown of Tyre Sales in India by Market and Product (FY2017, in volume)
Passenger vehicle Medium & high commercial vehicle (M&HCV)
OEM Replacement Export OEM Replacement Export
Volume 43% 51% 6% 15% 71% 14%
Two- and three-wheeler Light commercial vehicle (LCV)
OEM Replacement Export OEM Replacement Export
Volume 51% 47% 2% 27% 53% 20%
Source: (i) Michelin’s Internal Data on the World Tyre Market (2018). (ii) ATMA (2017b) ATMA Review. Indian Automobile
Industry, FY2016-17 (Apr-Dec), ATMA Periodicals, available on the webpage: http://www.mohitnarang.in/atma/wp-
content/uploads/2018/03/Atma-Periodicals_17-4-17.pdf, accessed December 6, 2018).

These three markets (OEM, replacement and
export markets) concern several lines of
products: M&HCV tyres (mainly bus and
truck tyres), car tyres, two- and three-wheeler
tyres, LCV tyres (see Table 2).
In the fiscal year 2015-16 (or FY2016),
commercial vehicle tyres accounted for 18%
of all tyres sold in India while their sales
constitute 63% of the revenue (see Figure 6).
This is explained not only by the cost
production but also by truck driver’s and
fleet manager’s business needs. They
demand a robust tyre at a good price,
withholding the load all the way. They have
been led to think in terms of cost per
kilometre rather than the tyre buy-in cost,
which prompts them to include the tyre
mileage and retreading in their cost
calculation. Furthermore, some sense of
relationship between the tyre and fuel
consumption has grown since several years.
From this point of view, the radial tyre is
much more economical than the cross-ply
tyre. From the tyre industry’s standpoint, all
these factors mean at best a stagnant demand,
which has even decreased in the years 2015-
2017, especially in the replacement segment
(Michelin’s Internal Data on the World Tyre
Market, 2018). The only increasing market
will be the OEM, driven by commercial
vehicle sales, which are correlated with the
GDP growth19.
Passenger vehicle (or car) tyre sales represent
14% of total tyre sales by volume and around
23% by value (see Figure 6). This difference
is explained by the increase in car
performance, the development of the radial
tyre and the emergence of strong brands in
the Indian market. In the coming years, both
replacement and OEM markets are expected
to grow annually in line of years 2015-17, at
a pace above 5% (Michelin’s Internal Data
on the World Tyre Market, 2018). OEM
market will lead the way as passenger vehicle
market is forecast to grow yearly at 10%
rate20.
In stark contrast to the commercial vehicle
tyre segment, two- and three-wheeler tyres
represent 54% of all tyres sold in India
whereas its forms 13% of sales (see Figure
6). There is strong competition in this
segment, with a strong focus of customers on
price, which results for tyre makers in regular
drops in prices and margins. Due to its
affordability and low maintenance cost, this
means of transport should grow at a faster
pace than passenger vehicle. As this tyre
market is quasi-exclusively made up of
cross-ply tyres, it is sheltered from Chinese
imports. Consequently, the domestic
industry will fully benefit from this demand,
which explains that all major tyre companies
have lately invested this segment21.

The Tyre Industry in India: Market Shares and Competition

In FY2018, the Indian tyre market locally 60 manufacturing facilities along
amounted to approximately Rs. 595,000 with dozen of importers (mostly
million. This market is made up of 39 Chinese). However, four Indian tyre
Indian and foreign companies operating makers alone―MRF (leader), Apollo

_________________________________ 8 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

Tyres, JK Tyre and CEAT―stand out industry concentration is even stronger,

with cumulated sales accounting for especially in the commercial tyre segment
around 65% of the entire tyre market (see (see Table 3).
Figure 7). In terms of volume, the
Figure 7 – Market Shares (in Value) of Tyre Makers in India (FY2018)

MRF
24%
Others
35%

Apollo Tyres
18%
CEAT
11% JK Tyre
12%

Nota Bene: we estimated the market shares of tyre makers in this figure by dividing their respective
FY2018 total sales (minus foreign sales) by the FY2018 total value of the Indian tyre market
(amounting to approximately Rs. 595,000 million).

Table 3 – Market Shares (in Volume) by Product (FY2018)

Passenger Commercial
Tyre maker
vehicle vehicle
MRF 10.9% (leader) 21.5%
Apollo Tyres 8.9% 24.9% (leader)
JK Tyre 6.0% 20.1%
Other Indian tyre makers 33.4% 22.2%
Global tyre makers* 32.6% 7.0%
Chinese exporters** 3.9% 4.3%
Other Asian exporters*** 4.3% -
* Cumulated market shares of the five world’s largest tyre makers
(Bridgestone, Goodyear, Michelin, Continental and Pirelli).
** This category also includes Taiwanese tyre makers such as Maxxis.
*** Cumulated market shares of Hankook (South Korea), Nexen (South
Korea), Kumho (South Korea), GITI (Singapore), Toyo (Japan),
Sumitomo (Japan) and Yokohama (Japan).
Source: Michelin’s Internal Data on the World Tyre Market (2018).

Despite a growing tyre market, several
incumbents have recently encountered
tougher competitive conditions and
subsequently faced financial distress,
leading to company restructuring and
industry consolidation: for instance,
Falcon Tyres, a full-range tyre maker,
filed for bankruptcy in 2017 and Birla
Tyres, a highly indebted tyre maker, sold
off one of its subsidiaries, Cavendish
Industries (specialized in manufacturing
commercial vehicle radial and two- and
three-wheeler tyres), to JK Tyre on April
2016.
Many factors may explain the difficulties
faced by some Indian tyre makers,
especially in the commercial vehicle
radial tyre and passenger car radial tyre
segments (see developments in the
introductory section) but the aggressive
pricing of Chinese and Taiwanese
exporters (Maxxis, Shandong Linglong

_________________________________ 9 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________
yre and Hangzhou Zhongce Rubber) in
the replacement market seems to be a key
destabilizing factor. Chinese tyre makers
started exporting commercial vehicle
radial tyres for the OEM market at the end
of the 1990s, as the local capacity was not
sufficient to fulfil the Indian truck
makers’ needs. Over time, Indian truck
makers considerably reduced their
Chinese tyre purchase, as they were not
satisfied with the tyre quality. Chinese
exporters have redirected their sales to
the replacement market where end
customers are more sensitive to tyre
price. Today, they grab a record 14.9%
share for commercial vehicle radial tyres
sold to the replacement market (see Table
4).
Consequently, Indian tyre makers have
lobbied their government to increase
customs duties on tyre imports. In
September 2017, the Indian government
took a first step against Chinese imports,
known as the Anti-Dumping Duty
(ADD): customs duties on commercial
vehicle radial tyres imported from China
and Taiwan rose from 10 to 15%. Over
time, the ADD enforcement has had
opposite impacts on the Indian tyre
market: on one side, it has led to slowing
down the flows of imported Chinese
commercial vehicle radial tyres in India
but on the other side, it has diverted these
flows to the passenger vehicle radial tyre
segment. While total tyre imports have
risen by 6.1% (compound average growth
rate, CAGR) between FY2015 and
FY2018, imported passenger car radial
tyres have grown at a faster pace (12.7%
_________________________________ 10 _________________________________
CAGR) during the same period 22. On
September 2018, the Indian government
responded to this trend by imposing
another set of customs duties (15%) on
imported passenger car radial tyres.
=> China’s actions
These higher customs duties will
probably lead Chinese exporters to
modify their Indian market strategy and
to favor equity entry modes over exports.
A good illustration is the recent
greenfield investment decision made by
one of the world’s largest two-wheeler
tyre maker, the Taiwan-based Maxxis
group. Targeting 15% (in volume) of the
Indian two- and three-wheeler tyre
segment in five years, Maxxis has locally
set up a manufacturing facility with a
yearly capacity of 7.3 million tyres in
March 2018.
Facing with these threats, Indian tyre
makers are currently reviewing their
competitive strategy and pursuing new
directions for growth: (i) extending their
product range and striving to become full-
range tyre makers, (ii) expanding abroad,
especially in emerging economies, and
(iii) developing their online distribution.
As regards this last growth direction,
Indian tyre makers have devised distinct
online distribution strategies: some tyre
makers sell tyres on their own e-
commerce website (Bridgestone India,
GoodYear India, Michelin India, MRF
and Apollo Tyres) while others favor
independent and specialized websites
such as tyres.cardekho.com or consumer
goods shopping websites such as
Snapdeal or Flipkart.
 _______________________ Tyre Maharajahs Case Study _______________________

Table 4 – Market Shares (in Volume) by Product / Market (FY2018)

Passenger vehicle Commercial vehicle
Tyre maker
OEM Replacement OEM Replacement
MRF 20.4% (leader) 15.2% 22.9%
Apollo Tyres 16.6% 31.2% (leader) 23.5% (leader)
64.3%
JK Tyre 11.2% 26.2% 18.7%
Other Indian tyre makers 6.7% 23.5% 21.9%
Global tyre makers* 32.6% 32.6% 3.1% 8.0%
7.1% (7.2% in the 5.0% (14.9% in
Chinese exporters** - 0.8%
radial segment) the radial segment)
Other Asian exporters*** 3.1% 5.4% - -
* Cumulated market shares of the five world’s largest tyre makers (Bridgestone, Goodyear, Michelin, Continental and Pirelli).
** This category also includes Taiwanese tyre makers such as Maxxis.
*** Cumulated market shares of Hankook (South Korea), Nexen (South Korea), Kumho (South Korea), GITI (Singapore), Toyo
(Japan), Sumitomo (Japan) and Yokohama (Japan).
Source: Michelin’s Internal Data on the World Tyre Market (2018).

Table 5 – Market Shares (in Volume) by Product / Technology (FY2018)

Passenger Commercial vehicle
Tyre maker
vehicle radial Cross-ply Radial
MRF 10.7% (leader) 26.6% (leader) 13.7%
Apollo Tyres 8.9% 23.7% 26.7% (leader)
JK Tyre 5.9% 19.4% 21.1%
Other Indian tyre makers 33.4% 30.3% 14.6%
Global tyre makers* 32.9% - 13.2%
Chinese exporters** 3.8% - 10.7%
Other Asian exporters*** 4.4% - -
* Cumulated market shares of the five world’s largest tyre makers (Bridgestone, Goodyear,
Michelin, Continental and Pirelli).
** This category also includes Taiwanese tyre makers such as Maxxis.
*** Cumulated market shares of Hankook (South Korea), Nexen (South Korea), Kumho (South
Korea), GITI (Singapore), Toyo (Japan), Sumitomo (Japan) and Yokohama (Japan).
Source: Michelin’s Internal Data on the World Tyre Market (2018).

The Tyre Industry in India: Competitors

■ MRF
CEO (FY2018): K.M. Mammen
Sales (FY2018): Rs. 156,956.2 million ($US 2,396
million)
Indian and world market shares (in value,
FY2018): 24.1% (ranked 15th world tyre maker)
Listed on the Bombay Stock Exchange: Yes
The creation of Madras Rubber Factory
(MRF) in Chennai (Tamil Nadu province)
dates back to 1946. The company has been
leading the Indian tyre industry for 40 years
and ranks 15th among the 30 largest tyre
makers in the world. Its current market share
(in value) in India hovers around 24.1% (see
Figure 7). MRF is a full-range tyre maker
(see Table 6), which occupies a leading
position in most product segments in India
(passenger vehicle, two- and three-wheeler,
agriculture and OTR tyres).
MRF has eight manufacturing facilities
(mostly located in the south of India) and a
distribution network of 5,000 dealers in India
(including 4,200 directly-operated
stores―MRF TireTok, MRF MuscleZone
and MRF FASST―and 800 MRF T&S
franchised stores). In 2017, the Indian tyre
company started distributing its products
online through its website and the MRF T&S
network.
The first international move of the Indian
tyre company occurred in 1964 with the

_________________________________ 11 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

opening of a commercial representative Philippines and Middle East countries. Over

office in Lebanon. Today, the Indian tyre the FY2013-18 period, MRF’s sales in its
company achieves 8.6% of its sales abroad export markets have stagnated following the
through exports. Its main geographical intense price competition imposed by
markets are Sri Lanka, Indonesia, the Chinese tyre makers.
Table 6 – MRF: Product and Technology (FY2018)
Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle wheeler OTR vehicle
Cross-ply ■ ■ ■ ■
Radial ■ ■ ■ ■
Source: FY2018 MRF’s annual report (www.mrftyres.com/financial-results, accessed on November 26, 2018).

Table 7 – MRF: Market Shares (Value) (FY2005 and FY2018)

Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle wheeler OTR vehicle
2005 25% 19% n.a. 42% leader
2018 23% (leader) 25% n.a. 37% (leader) leader
Source: FY2018 MRF’s annual report (https://www.mrftyres.com/financial-results, accessed on November 26, 2018).

Table 8 – MRF: Financial Data (in Rs. m)

2013-14 2014-16 2016-17 2017-18
(FY 2014) (18 months) (FY2017) (FY2018)
Total sales 133,961.9 228,146.1 152,601.8 156,956.2
Foreign sales 13,320.0 18,560.0 13,160.0 13,530.0
Total assets 98,339.9 132,538.1 150,484.7 164,784.8
Shareholder equity 45,395.5 72,243.4 85,444.2 96,042.0
CSR expenses n.a. 225.5 392.4 94.9
R&D expenses 340.8 548.9 1,996.8 1,108.6
Input cost 82,989.0 111,629.1 76,799.5 89,853.8
Net profit 9,083.2 24,870.8 14,862.2 11,316.1
Market-to-book ratio 3.05 2.25 2.98 3.15
Note Bene: Before 2014, financial data of MRF were estimated over a yearly period ranging from
September N-1 to September N and from 2016, over a yearly period ranging from March N-1 to
March N.
Source: (i) Orbis (https://orbis.bvdinfo.com, accessed on November 26, 2018). (ii) MRF’s
annual reports (2014, 2015, 2016, 2017, and 2018; https://www.mrftyres.com/financial-results,
accessed on November 26, 2018).

■ Apollo Tyres share in value) and 17th among the 30 largest

CEO (FY2018): Onkar S. Kanwar
Sales (FY2018): Rs. 152,119.5 million ($US 2,322
million)
Indian and world market shares (in value,
FY2018): 17.7% (ranked 17th world tyre maker)
Listed on the Bombay Stock Exchange: Yes
Created in 1972, Apollo Tyres ranks 2nd in
the Indian tyre industry (with a 17.7% market
tyre makers in the world. Initially, Apollo
Tyres was specialized in manufacturing and
selling truck tyres. Building on a leading
competitive position in the commercial
vehicle segment (27% market share in value
and 24.9% in volume), Apollo Tyres has
followed two directions for growth: product
range extension and internationalization.
Throughout its history, the Indian tyre maker
has strived to expand into all tyre segments,
with its latest entry into the two- and three-
wheeler tyre segment in 2016 (see Table 9).
Today, Apollo Tyres is a full-range tyre
maker with a strong focus on the replacement

_________________________________ 12 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________
market where it achieves the largest share of
its sales in India.
As regards its internationalization, Apollo
Tyres differentiates itself from most of the
Indian tyre makers, which rely on exports to
expand abroad (except JK Tyre). First,
Apollo Tyres is today the Indian tyre maker
with the highest internationalization intensity
with a 30.5% foreign sales-to-total sales ratio
(see Table 11). The Indian tyre maker sells
its products in 102 countries with a majority
proportion of foreign sales achieved in the
European market. Second, the tyre maker’s
has leveraged its foreign sales mostly
through taking over local tyre makers and
setting up wholly-owned manufacturing and
distribution subsidiaries. These different
internationalization features explain why
Apollo Tyres is often cited as an example of
“emerging multinational.”
Apollo Tyres started its internationalization
by taking over Dunlop Tyres South Africa in
2006. This acquisition allowed the Indian
tyre maker to benefit from a manufacturing
base in South Africa and the “Dunlop” brand
rights for 32 African countries. After this first
international entry, Apollo Tyres accelerated
its international expansion pace with the
takeover of the Dutch tyre maker,
Vredestein, in 2009. Lastly, Apollo Tyres
consolidated its European position with a
record investment (Rs. 40,000 million) to set
up a wholly-owned manufacturing facility in
Hungary. As emphasized by the tyre maker’s
CEO, Onkar S. Kanwar, during the
inauguration: “this is the first time the
company has set up a plant outside India
from scratch”23. Fully operating in 2018, this
second manufacturing base in Europe (the
first one is the Vredestein’s manufacturing
facility in the Netherlands) allowed Apollo
Tyres to supply the local OEM and
replacement markets with an additional 5.5
million passenger vehicle tyres and 675,000
commercial vehicle tyres.
_________________________________ 13 _________________________________
While its internationalization strategy is
unique in the Indian tyre context, Apollo
Tyres has also suffered notable setbacks in
this matter. First, the rising level of South
Africa’s political and economic uncertainty,
which was observed at the beginning of the
2010s, produced operational disruptions,
sharp labor cost increase and financial issues
for the Apollo Tyres’ local subsidiary. As
stated by the tyre maker’s Chief Business
Officer, Sunam Sarkar, in Forbes India: “post
the 2010 Fifa World Cup in South Africa,
there was a lot of industrial unrest.
Electricity rates rose rapidly and the entire
tyre industry went on strike for a month.
Cheap Chinese imports to South Africa also
caused a lot of pain to domestic tyre
manufacturers”24. Finally, Apollo Tyres
decided to sell off Dunlop Tyres South
Africa and the “Dunlop” brand rights to
Sumitomo Rubber in 2014. Second, Apollo
Tyres attempted to enter the US tyre market
by launching a takeover bid on Cooper Tire
& Rubber (ranked 12th world tyre maker) in
2013. However, after a long negotiation
process, the bid ended up negatively with the
bid rejection from the US tyre maker’s
shareholders and after a strong opposition
expressed by Cooper subsidiary’s employees
in China.
Apollo Tyres has four manufacturing
facilities (with two additional manufacturing
facilities in Europe) and a distribution
network of 5,300 dealers in India (including
1,700 franchised exclusive stores: “Apollo
Zone” “Apollo CV Zone” and “Apollo
Point”). Its main ambition for the next years
is to dethrone MRF as the leader of the Indian
tyre industry. To this purpose, Apollo Tyres
has unveiled an ambitious 5-year investment
plan (Rs. 38,000 million), aiming to set up a
new manufacturing facility in India with a
capacity of 5.3 million passenger vehicle
tyres and 1 million commercial vehicle tyres.
 _______________________ Tyre Maharajahs Case Study _______________________

Table 9 – Apollo Tyres: Product Mix, Type and Technology (FY2018)

Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle wheeler OTR vehicle
Sales 39% 42% 7% 2% 10%
Cross-Ply ■ ■ ■ (since 2016) ■
Radial ■ (since 2000) ■ ■ ■ (since 2016) ■
Source: FY2018 Apollo Tyres’ annual reports (https://corporate.apollotyres.com/en-in/investors/financial-reporting/,
accessed on December 1, 2018).

Table 10 – Apollo Tyres: Market Shares (Value) (FY2005 and FY2018)

Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle wheeler OTR vehicle
2005 13% 26% 26% - 23%
27% (leader)
and 24% in the
2012 17% n.a. 2% n.a.
radial segment
(leader)
Source: FY2018 Apollo Tyres’ annual report (https://corporate.apollotyres.com/en-in/investors/financial-reporting/,
accessed on December 1, 2018).

Table 11 – Apollo Tyres: Financial Data (in Rs. m)

2013-14 2014-15 2015-16 2016-17 2017-18
(FY2014) (FY2015) (FY2016) (FY2017) (FY2018)
Total sales 135,098.2 128,692.2 129,195.1 143,217.6 152,119.5
Foreign sales 50,526.7 35,905.1 34,624.2 42,965.2 46,457.3
Total assets 90,455.8 91,352.2 116,538.2 152,961.1 201,532.4
Shareholder equity 45,746.2 54,190.3 66,046.1 72,899.5 97,766.7
CSR expenses n.a. 56.8 129.3 185.0 215.6
R&D expenses 757.5 1,042.7 1,712.5 1,749.4 1,559.7
Input cost 71,067.4 64,188.4 53,142.1 53,132.2 62,811.5
Net profit 10,050.5 9,776.0 11,229.6 10,989.9 7,238.8
Market-to-book ratio 1.76 1.70 1.35 1.46 1.61
Nota Bene: Apollo Tyres’ financial data were estimated over a yearly period ranging from March N-1 to March N.
Source: Orbis (https://orbis.bvdinfo.com, accessed on November 26, 2018) and Apollo Tyres’ annual reports (2014,
2015, 2016, 2017, and 2018; https://corporate.apollotyres.com/en-in/investors/financial-reporting/, accessed on December
1, 2018).

■ JK Tyre JK Tyre is a subsidiary of JK Industries,

CEO (FY2018): Raghupati Singhania
Sales (FY2018): Rs. 66,109.5 million ($US 1,009
million)
Indian and world market shares (in value,
FY2018): 12.2% (ranked 22nd world tyre maker)
Yearly manufacturing capacity (FY2018): 31.8
million tyres (7.9 million in Mexico and 23.9 million
in India)
Listed on the Bombay Stock Exchange: Yes
which is a conglomerate operating in
different Indian industries: cement (JK
Lakshmi), paper (JK Paper), food processing
(Umang Dairies), biotech (JK Agri
Genetics), insurance (JK Risk Managers &
Insurance Brokers) and tyres. JK Industries
created its tyre business unit in 1972. The
company ranks 3rd in the Indian tyre industry
(with a 12.2% market share in value) and
22nd among the 30 largest tyre makers in the
world. Throughout its history, JK Tyre has
privileged the acquisition mode to expand
quickly in the tyre industry, both locally and
internationally.
Pioneer of radial tyres in India, JK Tyre has
built a strong competitive position in the

_________________________________ 14 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

LCV and commercial vehicle tyre segment.
The Indian tyre maker enjoys the second
largest share for commercial vehicle radial
tyres (with 21.1% market share in volume,
see Table 5) and commercial vehicle tyres
sold in the OEM market (with 26.2% market
share in volume, see Table 4). It is also the
volume leader in the LCV (cross-ply and
radial) tyre segment with 32% market share.
This strong focus on the LCV and
commercial vehicle tyre segments is
reflected in the company’s total sales: this
segment accounts for 60% of the company
sales. Another focus of the tyre maker is the
replacement market where it achieves 58%
of its sales (with 19% for foreign sales and
23% for OEM).
While strengthening its competitive position
in the LCV and commercial vehicle tyre
segment, JK Tyre has sought new directions
for growth. First, it recently entered the two-
and three-wheeler tyre segment: on April 18,
2016, it completed the acquisition of the two-
and three-wheeler tyre maker, Cavendish
Industries (from the financially distressed
Birla Tyres). This acquisition brings JK Tyre
three manufacturing facilities with a yearly
capacity of 8.5 million tyres. This acquisition
adds manufacturing capacities in the
commercial vehicle radial tyre segment and
allows JK Tyre to enter the two- and three-
wheeler tyre segment. Second, attracted by
the high growth in the Indian aircraft
industry, JK Tyre intends to develop new
product lines for this industry in the near
future.
JK Tyre has nine manufacturing facilities
(with three additional manufacturing
facilities in Mexico) and a distribution
network of 3,700 dealers in India (including
400 directly-operated stores: 60 “JK Tyre
Xpress Wheels” stores for two- and three-
wheeler tyres, 300 “JK Tyre Steel Wheels”
stores for passenger vehicle tyres and 40 “JK
Tyre Truck Wheels” stores for commercial
vehicle tyres).
JK Tyre expanded abroad early in its history.
In 1974, it signed a distribution agreement
with General Tire & Rubber to sell its tyres
in the US. This was its first international
move. Today, JK Tyre exports its products in
over 100 countries and achieves 14.7% of its
sales abroad. The acquisition (completed on
April 11, 2008) of the Mexican tyre maker,
Tornel, was a milestone in its international
expansion strategy. It has allowed JK Tyre to
access the Central and South American tyre
market and gain greater access to the North
American tyre market benefitting from the
North American Free Trade Association
(NAFTA) agreement. JK Tyre has steadily
invested in its Mexican subsidiary, growing
the yearly manufacturing capacity from 4.5
million tyres (FY2008) to 7.9 million tyres
(FY2018). This acquisition can be viewed as
a success with regard to the foreign sales
growth reported from 2007 (year prior to the
acquisition) to 2018. Over this period, the
foreign sales grew from Rs. 4,810 million
(15% of total sales) to Rs. 12,580 million
(19%) (see Table 14).

Table 12 – JK Tyre: Product Mix, Type and Technology (FY2018)

Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle wheeler OTR vehicle
21% (including See passenger
Sales 60% 3% 16%
LCV) vehicle
Cross-ply ■ ■ ■ (since 2016) ■
Radial ■ ■ ■ ■
Source: FY2018 JK Tyre’s annual reports (https://www.jktyre.com/annualreports.aspx, accessed on November 28, 2018).

Table 13 – JK Tyre: Market Shares (in Value) (FY2005 and FY2018)

Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle wheeler OTR vehicle
2005 18% 25% n.a. - n.a.
2018 14% 32% n.a. 3% n.a.
Source: FY2018 JK Tyre’s annual report (https://www.jktyre.com/annualreports.aspx, accessed on November 28, 2018).

_________________________________ 15 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

Table 14 – JK Tyre: Financial Data (in Rs. m)

2013-14 2014-15 2015-16 2016-17 2017-18
(FY2014) (FY2015) (FY2016) (FY2017) (FY2018)
Total sales 82,609.7 80,428.5 76,069.8 83,832.8 85,434.1
Foreign sales 10,400.0 8,440.0 5,810.0 9,370.0 12,580.0
Total assets 60,426.1 67,321.9 70,781.3 104,351.9 105,674.6
Shareholder equity 10,971.2 14,010.1 17,514.3 21,097.9 21,031.1
CSR expenses n.a. 20.7 47.5 43.5 45.5
R&D expenses 290. 381.3 478.1 570.1 609.6
Input cost 48,843.3 44,346.5 37,893.2 44,514.0 52,466.5
Net profit 2,630.2 3,296.6 4,696.1 3,602.2 576.3
Market-to-book ratio 0.67 1.71 1.09 1.41 1.74
Nota Bene: JK Tyre’s, financial data were estimated over a yearly period ranging from March N-1 to March N.
Source: (i) Orbis (https://orbis.bvdinfo.com, accessed on November 26, 2018). (ii) JK Tyre’s annual reports (2014, 2015,
2016, 2017, and 2018; https://www.jktyre.com/annualreports.aspx, accessed on November 28, 2018).

■ CEAT Historically, CEAT has expanded over time

CEO (FY2018): Anant Goenka
Sales (FY2018): Rs. 64,291.4 million ($US 981
million)
Indian market share (in value, FY2018): 10.8%
Yearly manufacturing capacity (FY2018): 34.6
million tyres
Listed on the Bombay Stock Exchange: Yes
The CEAT brand originates from the
Italian CEAT group (Cavi Electrici Affini
Torino), which created a wholly-owned
subsidiary in India in 1958, CEAT Tyres of
India. RPG group took over the tyre maker
in 1982. RPG group is an Indian
conglomerate operating in communication
technology (KEC International), software
(Zensar Technologies), biotech (RPG Life
Sciences), and tea and rubber plantations
(Harrisons Malayalam). While being part of
the Indian RPG group, CEAT has kept
strong ties with Italy: in 1981 and 2011, it
signed an agreement with the Italian tyre
maker, Pirelli, for transferring its
worldwide rights for the CEAT brand; and
in 2018, it became the official sponsor of the
Italian football team, Torino FC.
by focusing on two product segments:
commercial vehicle and two- and three-
wheeler tyres. Recently, it shifted its focus
more on the passenger vehicle tyre,
agriculture and OTR segments as these
record increasing margin and growth (see
Table 16). The CEAT’s market mix follows
a standard pattern for the largest Indian tyre
makers, with a strong emphasis on
replacement (61% of its sales with 12% for
foreign sales and 27% for OEM).
CEAT has six manufacturing facilities (five
in India and one in Sri Lanka) and a
distribution network of 4,500 dealers in
India (including 280 directly-operated two-
wheeler stores and 500 exclusive franchised
stores, “CEAT Shoppes”).
In 1981, CEAT initiated its first
international move by signing a worldwide
distribution agreement with Pirelli. Today,
CEAT exports its products in over 100
countries, achieving 12% of its sales abroad
(see Table 17). It has established
representative offices in Indonesia,
Germany and the United Arab Emirates,
and has set up a 50:50 manufacturing joint
venture (CEAT Kelani) in Sri Lanka where
it now occupies a leading market position.

_________________________________ 16 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

Table 15 – CEAT: Product Mix, Type and Technology (FY2018)

Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle wheeler OTR vehicle
7% (agriculture)
Sales 14% 32% 12% 31%
and 4% (OTR)
Cross-ply ■ ■ ■ ■
Radial ■ ■ ■
Source: FY2008 CEAT’s annual report (https://www.ceat.com/corporate/investor/financials, accessed on November 30, 2018).

Table 16 – CEAT: Market Shares (in Value) (FY2005 and FY2018)

Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle wheeler OTR vehicle
2005 11% 18% 22% 11% 16%
2018 8% 11% n.a. 28% n.a.
Source: FY2018 CEAT’s annual report (https://www.ceat.com/corporate/investor/financials, accessed on November 30, 2018).

Table 17 – CEAT: Financial Data (in Rs. m)

2013-14 2014-15 2015-16 2016-17 2017-18
(FY2014) (FY2015) (FY2016) (FY2017) (FY2018)
Total sales 55,679.7 57,747.3 61,735.9 64,599.4 64,291.4
Foreign sales 11,135.9 10,394.5 8,025.6 7,751.9 7,714.9
Total assets 35,400.5 37,816.7 41,079.5 49,169.4 51,609.9
Shareholder equity 10,286.1 17,461.1 20,869.8 24,441.0 26,294.6
CSR expenses 37.8 34.4 77.3 101.1 107.1
R&D expenses 187.0 215.5 532.8 1,331.6 1,008.0
Input cost 35,649.9 33,626.1 29,537.8 33,088.8 36,521.4
Net profit 2,707.8 3,139.2 4,357.1 3,592.2 2,332.9
Market-to-book ratio 1.49 1.90 2.09 2.19 2.31
Nota Bene: CEAT’s financial data were estimated over a yearly period ranging from March N-1 to March N.
Source: (i) Orbis (https://orbis.bvdinfo.com, accessed on November 30, 2018). (ii) CEAT’s annual reports (2014, 2015,
2016, 2017, and 2018; https://www.ceat.com/corporate/investor/financials, accessed on November 30, 2018).

■ TVS Srichakra Srichakra manufactures and sells the full

CEO: Shobhana Ramachandhran
Sales (FY2018): Rs. 22,181.3 million ($US 339
million)
Indian market share (in value, FY2018): 3.3%
Yearly manufacturing capacity (FY2018): 26.0
million tyres
Listed on the Bombay Stock Exchange: Yes
The TVS automobile distribution group
created TVS Srichakra in 1982. TVS
range of two- and three-wheeler tyres and
has recently expanded into the OTR and
agriculture tyre segment. The two- and
three-wheeler tyre specialist has a leading
position in the OEM market where it
achieves most of its sales (see Table 18).
As regards its international expansion, the
Indian tyre maker exports its products in 65
countries (mostly in Africa and South
America), achieving 9.4% of its sales
abroad (see Table 20).

_________________________________ 17 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

Table 18 – TVS Srichakra: Tyre and Technology (FY2018)

Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle wheeler OTR vehicle
Cross-ply ■ ■
Radial ■
Source: FY2018 TVS Srichakra’s annual report https://www.tvstyres.com/financial/annual.php, accessed on December
6, 2018).

Table 19 – TVS Srichakra: Market Shares (in Value) (FY2005 and FY2018)
Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle Wheeler OTR vehicle
2005 - - - 21% n.a.
2018 - - - 26% n.a.
Source: FY2018 TVS Srichakra’s annual report https://www.tvstyres.com/financial/annual.php, accessed on December
6, 2018).

Table 20 – TVS Srichakra: Financial Data (in Rs. m)

2013-14 2014-15 2015-16 2016-17 2017-18
(FY2014) (FY2015) (FY2016) (FY2017) (FY2018)
Total sales 19,393.0 21,805.1 23,606.0 21,355.3 22,181.3
Foreign sales 2,237.5 2,065.7 2,044.8 2,005.1 2,102.0
Total assets 10,252.2 9,695.5 9,617.3 13,909.6 14,250.7
Shareholder equity 2,134.1 2,822.8 4,121.4 5,534.3 6,312.4
CSR expenses n.a. 8.8 15.6 31.2 41.8
R&D expenses 296.2 171.5 235.9 250.8 295.9
Input cost 11,009.0 11,487.6 10,624.4 11,411.6 12,299.1
Net profit 565.8 996.3 1,862.2 1,496.9 1,173.4
Market-to-book ratio 0.95 3.76 4.29 4.76 3.03
Nota Bene: TVS Srichakra’s financial data were estimated over a yearly period ranging from March N-1 to March N.
Source: (i) Orbis (https://orbis.bvdinfo.com, accessed on November 30, 2018). (ii) TVS Srichakra’s annual reports (2014,
2015, 2016, 2017, and 2018; https://www.tvstyres.com/financial/annual.php, accessed on December 6, 2018).

■ Goodyear India 1961 and corresponds to the first entry of

CEO (FY2018): Rajeev Anand
Sales (FY2018): Rs. 17,426.2 million ($US 266
million)
Indian market share (in value, FY2018): 2.9%
Listed on the Bombay Stock Exchange: Yes
Goodyear India is the Indian wholly-owned
subsidiary of the US Goodyear Tire &
Rubber group, the third largest tyre maker
in the world. This subsidiary was created in
the Goodyear Tire & Rubber group into the
Indian tyre market.
Goodyear India operates two plants, which
manufacture radial (passenger vehicle,
commercial vehicle, LCV and agriculture
and OTR) tyres. The Indian tyre maker is
the leader (in value) in the radial agriculture
tyre segment (see Table 22).
Goodyear India achieves the majority share
of its sales in the OEM market. It also
distributes its products through a multi-
brand dealer network.

_________________________________ 18 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

Table 21 – Goodyear India: Tyre and Technology (FY2018)

Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle wheeler OTR vehicle
Cross-ply
Radial ■ ■ ■ ■
Source: FY2018 Goodyear India’s annual report (https://www.goodyear.co.in/investor-relations; accessed on December 5,
2018).

Table 22 – Goodyear India: Market Shares (in Value) (FY2005 and FY2018)
Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle Wheeler OTR vehicle
2005 10 to 14% 4% - - 10 to 14%
Leader in the
radial
2018 n.a. n.a. - - agriculture
segment
Source: FY2018 Goodyear India’s annual report (https://www.goodyear.co.in/investor-relations; accessed on December 5,
2018).

Table 23 – Goodyear India: Financial Data (in Rs. m)

2015-16 2016-17 2017-18
(FY2016) (FY2017) (FY2018)
Total sales 18,969.7 16,600.1 17,426.2
Total assets 9,349.6 10,895.7 12,975.7
Shareholder equity 6,141.2 7,070.8 8,021.9
Input cost 6,245.2 5,736.1 6,998.6
Net profit 1,196.6 1,262.8 1,298.1
Market-to-book ratio 1.90 2.76 3.20
Nota Bene: Goodyear India’s financial data were estimated over a yearly period
ranging from March N-1 to March N.
Source: (i) Orbis (https://orbis.bvdinfo.com, accessed on November 30, 2018). (ii)
Goodyear India’s annual reports (2014, 2015, 2016, 2017, and 2018;
https://www.goodyear.co.in/investor-relations, accessed on November 30, 2018).

■ Bridgestone India manufacturing facility in 1996. Today,

CEO: Parag Satpute
Yearly manufacturing capacity (2018): 5.4 million
tyres
Listed on the Bombay Stock Exchange: No
Bridgestone India is the Indian wholly-
owned subsidiary of the Japanese
Bridgestone group, the world’s largest tyre
maker.
The Japanese group entered the Indian tyre
industry by setting up its first
Bridgestone India operates two plants,
which manufacture 5.4 million radial
(passenger vehicle, commercial vehicle and
two- and three-wheeler) tyres. This
manufacturing capacity allows Bridgestone
India to meet 90% of its India tyre demand
(the remainder is covered with imports).
Bridgestone India has a balanced approach
to the Indian tyre market with 53% of its
sales in the OEM segment and 47% in the
replacement segment.
Bridgestone India has a distribution
network of 3,000 dealers in India (including
500 exclusive “Bridgestone” stores).

_________________________________ 19 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

Table 24 – Bridgestone India: Tyre and Technology (FY2018)

Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle wheeler OTR vehicle
Cross-ply
Radial ■ (since 1996) ■ (since 1996) ■ (since 2016)
Source: FY2018 Bridgestone India’s annual report (http://www.bridgestone.co.in/Investors_Information.aspx; accessed on
December 5, 2018).

Table 25 – Bridgestone India: Market Shares (in Value) (FY2005 and FY2018)
Passenger Commercial Two- and three- Agriculture and
LCV
vehicle vehicle Wheeler OTR vehicle
30% in the
2005 n.a. - - -
radial segment
19% (leader in
2018 the radial n.a. - n.a. -
segment)
Source: FY2018 Bridgestone India’s annual report (http://www.bridgestone.co.in/Investors_Information.aspx; accessed on
December 5, 2018).

Table 26 – Bridgestone India: Financial Data (in Rs. m)

2015-16 2016-17
(FY2016) (FY2017)
Total sales 28,088.7 26, 963.4
Total assets 38,063.3 41,314.6
Shareholder equity 27,121.3 30,217.2
Input cost 11,268.0 9,730.4
Net profit 1,942.3 3,101.8
Nota Bene: Bridgestone India’s financial data were estimated
over a yearly period ranging from March N-1 to March N.
Source: Orbis (https://orbis.bvdinfo.com, accessed on
December 5, 2018).

End Notes
1
RubberAsia, Indian tyre industry has big growth potential; interview of Anant Goenka, ATMA Chairman, May 18, 2018
(https://www.rubberasia.com/2018/05/18/indian-tyre-industry-big-growth-potential-anant-goenka-chairman-atma/, accessed
on December 3, 2018).
2
TyreAsia, Changing face of Indian tyre industry, November 5, 2018 (http://tyre-asia.com/2018/11/05/changing-face-of-
indian-tyre-industry/, accessed on December 3, 2018).
3
International Monetary Fund, World Economic Outlook: Challenges to Steady Growth, October 2018,
(https://www.imf.org/en/Publications/WEO/Issues/2018/09/24/world-economic-outlook-october-2018, accessed on December
3, 2018).
4
Society of Indian Automotive Manufacturers (SIAM), Automotive Mission Plan 2026,
(http://www.siamindia.com/uploads/filemanager/47AUTOMOTIVEMISSIONPLAN.pdf, accessed on December 3, 2018).
5
The Economic Times Auto, Imported car tyres to become dearer; Govt hikes custom duty by 5%, September 26, 2018
(https://auto.economictimes.indiatimes.com/news/tyres/imported-tyres-to-become-dearer-govt-hikes-custom-duty-by-
5/65968616, accessed on December 16, 2018.
Commodity Online, Indian tyre industry hit by weak Natural Rubber supplies, December 4, 2017
(https://www.commodityonline.com/commodity-news/indian-tyre-industry-hit-by-weak-natural-rubber-supplies/news-
now/18049, accessed on December 17, 2018).
6
The Financial Express, Natural rubber output may decline by 20% due to Kerala Floods, adversely impact Indian tyre
industry, September 7, 2018 (https://www.financialexpress.com/industry/natural-rubber-output-may-decline-by-20-due-to-
kerala-floods-adversely-impact-indian-tyre-industry/1305061/, accessed on December 17, 2018).
7
Money Control, Not after volume, but after profitable growth, says Neeraj Kanwar of Apollo Tyres, May 24, 2018
(https://www.moneycontrol.com/news/business/companies/not-after-volume-but-after-profitable-growth-says-neeraj-kanwar-
of-apollo-tyres-2575311.html, accessed on December 17, 2018).
8
The Economic Times Auto, Imported car tyres to become dearer; Govt hikes custom duty by 5%, September 26, 2018,
(https://auto.economictimes.indiatimes.com/news/tyres/imported-tyres-to-become-dearer-govt-hikes-custom-duty-by-
5/65968616, accessed on December 16, 2018).

_________________________________ 20 _________________________________
 _______________________ Tyre Maharajahs Case Study _______________________

9
The Economist, The dire consequences of India’s demonetization initiative, December 3, 2018
(https://www.economist.com/finance-and-economics/2016/12/03/the-dire-consequences-of-indias-demonetisation-initiative,
accessed on December 17, 2018).
10
The Economic Times, Bharat Stage VI norms: Know how they will impact you, October 25, 2018,
(https://economictimes.indiatimes.com/industry/auto/cars-uvs/bharat-stage-vi-norms-know-how-they-will-impact-
you/articleshow/66362907.cms, accessed on December 17, 2018).
11
ATMA (2017b) ATMA Review. Indian Automobile Industry, FY2016-17 (Apr-Dec), ATMA Periodicals
(http://www.mohitnarang.in/atma/wp-content/uploads/2018/03/Atma-Periodicals_17-4-17.pdf, accessed on December 6,
2018).
12
Alphà Invesco, Understanding the Indian tyre industry, key players and the road ahead, 2018, available on the webpage:
https://www.alphainvesco.com/blog/understanding-the-indian-tyre-industry/. Accessed on 12/16/2018.
13
ATMA (2017b) ATMA Review. Indian Automobile Industry, FY2016-17 (Apr-Dec), ATMA Periodicals,
( http://www.mohitnarang.in/atma/wp-content/uploads/2018/03/Atma-Periodicals_17-4-17.pdf, accessed December 6, 2018).
Frost & Sullivan, Indian Passenger Vehicles Market, Forecast to 2020. New Models Launched in the Super-compact, Mid-size,
and Compact Sports Utility Vehicle Segment at Aggressive Pricings are Responsible for Driving the Indian Passenger Vehicle
Market, January 2018.
14
Frost & Sullivan, Indian Commercial Vehicles Market Trends and Forecasts Business Model Impact in the Face of Impeding
Segmental Shifts and Demand Drivers, September 2016.
15
ATMA (2017b), ATMA Review. Indian Automobile Industry, FY2016-17 (Apr-Dec), ATMA Periodicals,
(http://www.mohitnarang.in/atma/wp-content/uploads/2018/03/Atma-Periodicals_17-4-17.pdf, accessed on December 6,
2018).
16
Autocar Professional, India’s 2-wheeler industry sells over 20m units for the first time in a fiscal, April 4, 2018
(http://www.autocarpro.in/news-national/india-wheeler-industry-sells-20m-units-fiscal-28927, accessed on December 16,
2018).
17
Team-BHP, Tractor sales figures in India, May 5, 2018 (https://www.team-bhp.com/forum/commercial-vehicles/198172-
tractor-sales-figures-india.html, accessed on December 16, 2018).
18
RubberAsia, Enhance anti-dumping duty on Chinese tyres: Anant Goenka, Chairman, ATMA, October 11, 2018
(https://www.rubberasia.com/2018/10/11/enhance-anti-dumping-duty-chinese-tyres-anant-goenka-chairman-atma/, accessed
on December 17, 2018).
19
Frost & Sullivan, Indian Commercial Vehicles Market Trends and Forecasts Business Model Impact in the Face of Impeding
Segmental Shifts and Demand Drivers, September 2016.
20
Frost & Sullivan, Indian Passenger Vehicles Market, Forecast to 2020. New Models Launched in the Super-compact, Mid-
size, and Compact Sports Utility Vehicle Segment at Aggressive Pricings are Responsible for Driving the Indian Passenger
Vehicle Market, January 2018.
21
TyreAsia, 2 wheeler tyre market gets busy, January 3, 2017 (http://tyre-asia.com/2017/01/03/2-wheeler-tyre-market-gets-
busy/, accessed on December 16, 2018).
22
The Times of India, PCR tyre hike won’t have major impact, September 28, 2018 (accessed through Factiva on December 7,
2018).
23
TyreAsia, Apollo Tyres’ global growth journey, May 2, 2018 (accessed through Factiva on December 3, 2018).
24
Forbes India, Apollo Tyres quest for a global grip, October 12, 2016 (http://www.forbesindia.com/article/northen-
giants/apollo-tyres-quest-for-a-global-grip/44429/1, accessed on December 12, 2018).

_________________________________ 21 _________________________________