"We are focused on the replacement market"

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When the RPG Group took over CEAT India in 1982, it was a strong name in a market dominated by a handful of domestic players. In the 2007 CARE report on the Indian tyre industry, however, CEAT has slid to fourth position in the Rs 19,000-crore domestic tyre industry, with its share falling to 13%. The market is currently led by MRF (22%) followed by Apollo (21%) and JK (18%). Why is it that despite a strong distribution network and brand name, CEAT has been unable to hold on to its customers? Arnab Banerjee, vice-president, marketing, CEAT takes a volley of questions from FE’s Radhika Sachdev.

What’s the gameplan behind CEAT’s recent logo change? What did the exercise cost the company?

CEAT is investing in fresh capacities for aggressive growth in the domestic as well as the global markets. This logo change was necessary to improve the brand connect with today’s youth, which is a mandatory first step to enhance market shares. This will be an ongoing initiative and the cost will be spread over a large number of activities.

Why has CEAT been steadily losing share in all categories, even when capacity utilisation has improved in the past three years, and all the other players (MRF, Apollo, JK etc) have been gaining at the expense of smaller companies?

On the contrary, CEAT’s business mix has been steadily improving over the last two years in favour of the most profitable replacement segment. Our market share in the replacement market has either grown or have been maintained more or less. That includes truck tyres, light trucks, 2W (two-wheeler), OTRs (off-the-road) etc. In the truck segment, we have 14% market share in the replacement market and this share is also on an up trend.

Meanwhile, in exports, among ATMA companies we are the top exporter from India. We clocked a turnover in excess of Rs 500 crore in exports and found this business extremely profitable.

The Indian tyre market has undergone a significant shift since FY02 in favour of passenger cars, LCVs and motorcycles. What is your share in these categories?