Local understanding, aggressive channel expansion driving growth
The Indian tyre market, in line with the country’s automobile industry, has emerged as one of the brightest spots for global brands, given its growing size and immense expansion potential. A Japanese tyre heavyweight and world market leader in terms of volumes, Bridgestone has been among the top brands to have taken the challenge to home-grown tyre brands in the Indian market.
We spoke to Mr. Kazutoshi Oyama, Executive Director – Sales and Marketing, Bridgestone India, to get insights about the company’s journey in the Indian market, the challenges and opportunities ahead, the long-term targets, etc.
Excerpts:
The year 2016 was a mixed one for the Indian automotive industry. How was it for Bridgestone and how were your sales across different segments? What were your major highlights during the year?
The year was quite good for Bridgestone as we witnessed steady growth, and we continue to be the leading tyre brand in the Indian market. We saw some vital product introductions to the industry like our flagship tyres Potenza S001 and Turanza T001 and the launch of our motorcycle tyres “Neurun”. Firestone, the legendary American brand of tyres, was our biggest launch of 2016 wherein we introduced FR500 for the passenger car tyre segment and LE02 for the SUV car tyre segment for our value-seeking customers. The country was hit by a demonization glitch which affected the Indian economy and also the tyre industry. However, the impact is getting neutralized, and subsequently tyre sales are going up.
While radials have become standard in the passenger car segment, it is steadily catching up in the commercial vehicle space too. The TBR segment has emerged as a highly competitive one with home-grown brands upgrading capabilities big time in the last decade, while global majors, including Bridgestone, have brought in the best of technology and know-how to give stiff competition. How strong are you in TBRs at present in India and how do you plan to strengthen presence in this space given the market conditions and fierce competition?
India is a huge truck and bus market for us since the transportation segment is witnessing a surge and demand for radial tyres is also increasing.
Bridgestone launched TBR tyres in India in 2006 and our Pune plant started manufacturing TBR tyres in 2010 in order to quickly meet the customer requirement.
There are different types of customers with different behavioral patterns, operations and needs. We have holistically profiled such segments for the future and we look to introduce superior products that deliver high performance to these target segments. We launched our fuel-efficient ECOPIA range of TBR tyres for our eco-conscious consumers. There is a surge in demand for tubeless TBR tyres in the Indian market. Bridgestone is a global player in tubeless TBR tyre sales and hence will focus on this segment aggressively.
Efforts are being taken to improve penetration in the market by aggressively expanding our channels and establish a strong dealer network to provide quality products to the remotest corners of our country. In addition, we are currently supplying our tyres to major OEMs.
Bridgestone has been a global leader when it comes to rolling out tyres with the best CPKM. The Indian market is perhaps quite a different one in the way customers perceive tyres and run their vehicles, so the initial cost of the tyre still plays a major role in the minds of fleet operators (in the TBR segment). How has Bridgestone handled this challenge and what is your strategy to further penetrate the market?
TBR in India sells based on performance, price, cost per km and other factors, but there is an increase in the number of customers who appreciate quality products. It’s important to provide proper information and educate customers to improve their operations in the long run. For the same, we have our Bridgestone Fleet Points (BFPs) which are customer’s one-stop solution for TBR tyres available across the country.
We are focusing on each segment with a strategic approach and will also be launching new patterns and new sizes. Our aim is to bring a complete portfolio of superior quality products and services to our consumers.
How is the current tyre segment market scenario in India?
The tyre industry is currently in the recovery phase after the recent demonetization hitting the economy. With the replacement and OE market improving, we anticipate an overall improvement in the industry. High growth in GDP is projected and this would benefit the automobile and ancillary industries. Also, acceleration in the automobile sales and demand in the replacement market will help in improving the challenging tyre industry scenario.
Could you divulge your market share in the TBR and passenger car categories? How has the market accepted your two-wheeler tyres launched last year?
Bridgestone India is one of the leading players in the passenger car tyre segment. It has been a strong player in the TBR segment wherein our expertise also lies in working in other markets globally. We are looking at expanding our product line-up, channel networks to be able to reach out to customers effectively. We are also supplying to major OEs and will increase our OE business further.
Neurun was launched in 2016. The two-wheeler tyre market is very competitive with domestic players leading the market space, but soon we will be expanding our channels for better availability of Neurun. Our two-wheeler tyre sales are picking up post demonetization.
The Indian automobile space is booming and different segments and categories of cars, buses, two-wheelers, etc., are making it to this market. How has this growth affected the tyre industry, especially your business?
The automobile industry has expanded its offerings by introducing newer car segments basis the customer segmentation and demand. These newer segments have contributed to the overall increase in the growth of the automobile industry in the country, which should be positive for the tyre industry.
Talking from an Asian and also a global perspective, how important is the Indian market for Bridgestone? Given the size and the potential of the country, what percentage of your sales/growth do you think would come from India as we move forward? How do you view competition in India?
Indian Market: India’s automobile sector is one of the fastest and largest growing globally. This, supported by the growth in the Indian economy, makes India a significant market for Bridgestone. It entered India more than 20 years ago, established two plants in the country and is one of the leading tyre companies in both the OEM and replacement markets. Based on our foundation of more than two decades in India, we have become one of the leaders in our business and look at growing stronger.
Competition: The Indian tyre industry has the equal presence of global and domestic players. They are investing and expanding in India which has added to the healthy competition in the market. Quality & consumer satisfaction will play a key role to sustain in the ever-challenging Indian market.
Come 2020, what position do you expect to achieve in the Indian market? What would your top three priorities be for the coming three-year period?
By 2020 vehicle production will continue to grow. This will directly impact the growth in tyre production and demand. With tyre growth we are positive of continuing to be leaders in the tyre industry.
Restricting to three points will be difficult, however we want to prioritize:
- a) Products: We will look at our eco-friendly tyre range for OEM eco-conscious customers and strongly focus on Firestone targeted at our value seeking customers
- b) Brand: Bridgestone has been signed on as an official Worldwide TOP Partner of the International Olympic Committee (IOC) for 10 years. There will be increased activities for Olympics to further strengthen our brand power
c) Channel: Customer Service has been of prime importance, and our family channels are a testimony to such commitment. We will expand our dealer network to provide to all our customers covering the entire gamut of the country