TVS Tyres has been investing in the right processes, and R&D, to stay ahead on the road.
TVS Srichakra Ltd, one of India’s leading manufacturers of two- and three-wheeler tyres, was started in 1982. The company is based in Madurai, Tamil Nadu, and is part of the $8.5-billion TVS Group, a respected name in the Indian auto components industry. The company rolls out around 2.8 million tyres every month from its two manufacturing facilities—one in Madurai and the other in Rudrapur (Uttarakhand). In addition, it exports to 70-odd countries.
In August last year, the company announced the launch of the brand TVS Eurogrip. Under the Eurogrip umbrella, a portfolio of 19 premium tyres that include zero-degree steel-belted radial tyres has been introduced.
Says P Srinivasavaradhan, president, “Over the years, we have been expanding our footprint by adopting cutting-edge technology driven by state-of-the-art R&D, and working with experts both in India and overseas. These extreme performance tyres provide unmatched stability at high speeds, and are rated to run at speeds up to 270kph.”
TVS Eurogrip. He explains the transition from TVS Tyres to TVS Eurogrip as an exercise in providing something new for the millennial generation. Surveys showed that younger customers were looking for products that were clearly a break from the past. “Earlier, people bought motorcycles and scooters for commuting from point A to point B. However, today, an increasing number of people are buying two-wheelers for leisure activities. Sports bikes are getting popular. We are introducing a contemporary product with a contemporary name. It is no longer one-product-serves-all. The market is getting segmented with interesting products,” he says.
In fact, the company went back to its customers to see what they want. The Eurogrip was a connection TVS Tyres already had for its export market. “High-end brands of two-wheelers such as Ducati, Triumph, BMW and KTM are all from Europe. Indian companies already have associations with them, such as Hero with Ducati, TVS Motors with BMW, and Bajaj with Triumph,” he adds. Tyres, therefore, have to be developed in Europe. To do this, an R&D centre has been established in Milan, Italy.
At the company’s R&D centre in Madurai, more than a dozen experts are working on designs for future products. It spent 1.3% of its revenue (nearly Rs 3,000 crore) on R&D in FY19. The company is also upgrading its test track in Madurai. “We stay invested across capabilities to tap emerging growth opportunities. The test track is getting upgraded for high-speed products,” says Srinivasavaradhan. “TVS Eurogrip tyres will be developed in Europe, made in India, and sold globally.”
The company has also made steel-belted radial motorcycle tyres. Srinivasavaradhan explains: “In motorcycle races, the rider has to do so many things in one lap. The tyre, which is the only contact between the motorcycle and the track, has to help provide fast lap timings. Motorcycles fitted with our tyres were able to do so, even when compared to tyres made outside India. The racing segment started experimenting with our tyres.” Tyres have gone high-tech over the years; there are 72 materials in the product, with high-quality polymers. This has resulted in tyres that provide both good grip and good mileage. Srinivasavaradhan adds all this has been made possible because the company has been constantly investing in the right processes.
Like all sectors in the Indian automotive industry, the recession has pinched tyres as well. By September 2018, one could see signs of demand slowdown in two-wheelers. In addition, personal insurance premium increased. The braking system had to be changed, which was very expensive. Then there were NBFC problems. Although the introduction of BS6 norms is very good for India, says Srinivasavaradhan, because of the other issues erupting at the same time, cost has gone up tremendously.
However, he is not unduly worried about the future, even with disruptions such as electric vehicles rocking the industry. “In the next three months, sales will pick up. OEMs have to push vehicles into the market before the introduction of BS6 norms by April 1. I can’t make any predictions after that period. In fact, the introduction of electric scooters is not going to affect the industry much. Tyres are probably the only component that does not need a rethought,” he says.
Another reason for his optimism is that the country still has a lot of potential for the growth of two-wheelers. “Our penetration, at 20%, on the roads is still very low, compared even to a country like Indonesia, where it is 40-50%,” Srinivasavaradhan adds.
(Opinions expressed are the author’s own)