JK Tyre & Industries on Friday introduced a new range of commercial vehicle (CV) tyres to further strengthen its position in the segment, where it is the market leader. Anuj Kathuria, president (India), JK Tyre & Industries , talks to Swaraj Baggonkar about the firm’s plans in the segment for price hikes.
How is the new launch going to help JK Tyre in the CV segment?
JK Tyre is the largest player in the CV segment. In the OEM (original equipment market) and replacement truck and bus radial (TBR) segment we are the leader. TBR is a keenly contested space (and) the launch will further strengthen our position. They (the new tyres) will be serving mines and construction applications which is a growing segment. People were using nylon or bias tyres in this segment, but they will be ready to shift to radials now.
How has the demand been in the replacement and OEM market for CVs?
In the TBR space, the demand in the replacement market is strong. The demand for medium and heavy vehicles is a little slow. The fourth quarter of FY24 was not as buoyant as Q4 is generally seen; Q1FY25 is not that great either, but we expect that as things settle down and work restarts on the infrastructure and transport segment, demand will come back.
What is the demand outlook?
The bus segment has seen a good pull from the OEM segment and this is true for internal combustion engines as well as electric vehicles. Demand for truck tyres should bounce back in the next couple of months.
What is the capacity for CV tyres at the company?
In 2022, we had announced a capex programme of Rs 800 crore, out of which Rs 530 crore was for passenger cars and Rs 260 crore was for CVs. Both projects have been commissioned. We now have sufficient capacity to meet demand. We had made a further capex programme of Rs 1,400 crore, of which Rs 1,000 crore was for passenger cars and Rs 400 crore was for CVs. This would be coming up in stages, but the final one would be in place by Q3FY26.
How are electric CV tyres different from those for regular CVs?
These tyres have a lower rolling resistance than normal ones, because they consume less energy. They also generate less noise. These tyres also have to carry the additional weight of the battery. The starting torque on EVs is higher than normal vehicles, there will be uneven wear if we do not have the specific compounds which do not have the wear-resistant properties.
How different are EV tyres when it comes to their margins?
We are ensuring that our margins are either equal or better than the non-EV tyres. In many of the stock keeping units (SKU) they are better than existing tyres. We are not terming this as a commodity. It is a differentiated product and that’s why it has got its premium.
Have you taken any price hike in this quarter?
We had taken a price hike of 1.5-2% in the beginning of May, and this was in line with the increase in raw material cost. Definitely, any price increase does not translate to a bottom line immediately, but we believe that in the coming quarter we will be able to pass it on. If there is further pressure coming in from raw material, depending on market forces, we have the intention to pass it onto the market.