When was the last time you took a look at your car tyre? We mean a good, hard look at your car tyre to determine if it was still road worthy?

Or, are you like most passenger vehicle owners not interested in the functional attributes of your tyre, not even in knowing which brand was used by the car manufacturer as long as it works?

Take our word for it, all that is going to change soon.

Companies under pressure from rising competition and cheap imports are holding out a whole lot of freebies. The changing ownership profile and the fact that the passenger car market is growing much faster than the commercial, is also goading tyre manufacturers to change track. They are hawking their products at branded retail formats, taking orders on phone or through websites and giving in to brand proliferation in the manner of an FMCG company to match every driver?s skill and style. That?s where you have tyre exchange schemes and easy finance options for getting a gleaming set of hot wheels.

Not surprisingly, the new name for this once ?unsexy? category is ?Fast Moving Consumer Durables? (FMCD).

According to a Credit Analysis & Research (CARE) report for 2007, the Indian tyre industry produced 736 lakh units of tyres garnering Rs 19,000 crore in FY07. MRF was the market leader (22% marketshare) followed by Apollo Tyres (21%). The other big players were JK Tyre & Industries (18%) and Ceat (13%).

?Fierce competition, low bargaining and declining margins are leading top players to focus on branding and strengthening their distribution network in order to increase marketshare,? says Subrato Basu, business manager for commercial tyre at Ceat.

As everyone knows the tyre industry derives its demand from the automobile industry. While OEM (original equipment manufacturer) market offtake is dependent on the new vehicle sales, replacement market, or what is known as the ?after market? demand depends on the total population of vehicles on road, road conditions, vehicle scrapping rules, overloading norms for trucks, average life of tyres and the practice of tyre retreading.

The main category of tyres produced is that of truck and bus tyres (commercial vehicle segment). This category accounted for 57% of the total tyre tonnage production in FY07, followed by light commercial vehicle (LCV) tyres that accounted for 9%. Of the total market, about 53% offtake was for the replacement market, 31% for OEM and 15% by the export market, according to the CARE report.

And the market is changing fast.

Fifteen years ago, the replacement or the ?after market,? was led by commercial vehicles (85%). Today, with the growth of passenger vehicle segment, this has shrunk to 65%. Hence the new focus on the individual customer and after sales service.

Overall, the top six companies still account for 88% of the total industry production. MRF with 22.32% is the market leader, followed closely by Apollo. JK has consolidated its position in the LCV, passenger car and OTR (off-the-road) category. Ceat is fourth but has recently lost marketshare. Birla and Goodyear are way behind in this race. (Source: CARE report on the Indian Tyre Industry, 2007.)

So who?s driving the segment?

In 1986, Ceat came out with an ambitious plan. It launched its first branded showroom called Ceat Shoppe. At one point they numbered around 500, across India, accounting for almost 35% of the company?s radial tyre sales, but some of these showrooms later had to be shut down.

A more robust model of the retail format was followed by JK that launched Steel Wheels in 110 cities in 1995 and soon they became hugely successful. They followed this up with ?dial a wheel? concept in Delhi.

?Our highest number of subscribers to this service are women, especially from areas like south Delhi, where we don?t have any delivery hassles,? explains Neeraj Bhatia, general manager, strategic planning, JK Tyres.

Apollo meanwhile, flagged off its first branded format in Patiala, followed by one in Chennai, recently. Fully air-conditioned lounge areas, cafeterias, Internet kiosk and in-store entertainment options are some of the features that the Apollo showroom, branded Apollo Radial World features, with a glass wall through which customers can actually watch their tyres being taken care of.

Trained staff is at hand to help them make the right tyre choice to best match their vehicle and driving style. So eye catching is this Apollo showroom in Patiala that it recently picked a gold at the 2008 In-Store Asia Visual Merchandising & Retail Signage Awards, the first given to a tyre company. ?We plan to launch 30 such stores by the year end where ever we have significant passenger vehicle sales,? said Satish Sharma, chief, India operations for Apollo Tyres.

Much like the JK dial-a-wheel concept, Apollo is also launching a website through which orders can be booked online and deliveries made through the nearest dealer. Although Basu is skeptical about the impact of such measures for a low engagement product like a car tyre, Priya Monga, business head, RC&M, admits, ?Tyre manufacturers are adopting innovative strategies to generate brand awar-eness and retain their consumers.?

Even Basu concedes that because there are more margins in the passenger car segment, per unit sale, the propensity of choosing a brand through advertising and promotions of this nature is growing.

On the downside, the frequency of sale in this category is lower, except in the used car segment, as a car owner is more likely to change his car than change his tyre. ?That?s what makes it a high value, low volume business in the passenger segment,? explains Ceat?s Basu.

The dynamic of the commercial sector are vastly different from the passenger market. ?No amount of brand equity works here, as a majority of purchase decisions are influenced by the dealer on the trust factor,? explains Sharma.

Therefore, in order to further consolidate its 29% hold over this market, Apollo (tailed by JK at 22%) has come out with an easy finance scheme with GE Capital. JK has a similar scheme with Sunderam Finance.

?Since, tyres are the second largest component bought on credit (after the vehicle), we offer commission to retailers, half of whom are exclusive to us, to extend loans to fleet owners,? says Sharma. A truck tyre can cost as much as Rs 11,000-15,000, against the Rs 4,000-5,000 for a car tyre.

However these days, many tyre manufacturers are also getting into the retreading business. Retreading is a process of applying a new tread (the portion which meets the road surface) over a used tyre. It costs less than 50% of the price of a new tyre and gives an additional mileage of approximately 30,000?40,000 kms for truck trucks. Generally, retreading is done one to three in a tyre?s life cycle. A highly fragmented industry crowded by over 10,000 players, the major players in this business are Elgitread, MRF, Apollo and Indag.

?With the improvement in the Indian road conditions and professional management of fleets, tyre abuse has substantially declined. Getting into the retreading business as a 360-degree service offering has thus begun to make strategic sense for the manufacturer,? explains Bhatia.

Apollo for instance has come out with a product called Dura Tread.

Under a much hyped ?tyre exchange scheme? a fleet owner can get any brand of a tyre retreaded with

DuraTread at 50% of the cost through an exchange voucher issued by

Apollo. JK also plans to foray into the business on a pilot basis soon, informed Bhatia.

?Our decision to enter into the retreading business was carefully thought out,? says Sharma. ?Radialisation in the commercial market is happening at a much slower pace (6-7%) than in the passenger segment (where its already 96%) and the market is also under threat from cheap imports from China. We are also expecting capacity expansion in the Bias tyre market with the revival of Modi Tyre after they have come out of the BIFR fold.

So eventually decided to strengthen our service offerings,? explains Apollo?s Sharma.

An RC&M study also reveals that tyre choice is largely based on efficiency. The average life of a tyre on Indian roads is 50,000 kms. Cost and toughness are important considerations for fleet owners. 70% of the owners change their tyres in six to eight months and another 20% in four to six months.

In such a scenario, ?The best tyres are the ones that give good mileage, ie, low wear and tear, have good load carrying capacity and that don?t heat over a short span. And the best companies are those that give good after sales service and educate fleet owners about other cost saving measures,? explains Monga.

So that explains why most tyre manufacturers are walking the service lane these days.