JK Tyre bets big on exports, replacement market to beat auto sales slump

NEW DELHI : JK Tyre & Industries expects exports to grow around 50 per cent in the ongoing fiscal to clock over 800 crore, which along with domestic replacement market will help offset decline in direct sales to automobile makers, according to a senior company official.

Image courtesy: JK Tyre
Image courtesy: JK Tyre

Due to the ongoing slump in the Indian automobile sector, the company has seen contribution from Original Equipment Manufacturer (OEM) segment to its overall sales decline to around 20 per cent from an earlier 32-33 per cent.

"We could actually combat that slowdown in OEMs (sales) to a large extent through increase in sales in the replacement market and exports," JK Tyre & Industries CFO Sanjeev Agarwal told PTI.

Also check these Vehicles

Find more Cars
Mahindra Xuv300 Turbo Sport (HT Auto photo)
₹10.35 - 12.9 Lakhs***Ex-showroom price
Add to compare
Check latest offers
Mercedes-benz Amg E53 Cabriolet (HT Auto photo)
2999 cc | Petrol | Automatic
₹1.3 Cr**Ex-showroom price
Add to compare
Maruti Suzuki Ytb (HT Auto photo)
₹7 - 11 Lakhs* *Expected Price
View Details
Maserati Mc20 (HT Auto photo)
₹3.69 Cr***Ex-showroom price
Add to compare
Check latest offers
Maruti Suzuki Baleno (HT Auto photo)
1197 cc | Petrol | Manual
₹6.5 - 10 Lakhs***Ex-showroom price
Add to compare
Check latest offers
Maruti Suzuki S-presso (HT Auto photo)
₹4.25 - 5.99 Lakhs***Ex-showroom price
Add to compare
Check latest offers

For example, he said in December JK Tyre's exports have gone up by more than 40 per cent and in the replacement market it grew by 18 per cent.

"Similarly, in the first nine months, the growth has been very good in the export market segment and also in replacement market. These have become a saviour for us and we could actually turn around the situation of decline in the OEM segment," he added.

Elaborating, Agarwal said in the first nine months, exports have grown by around 40-45 per cent resulting in revenue clocking over 800 crore as compared to 550 crore in the same period last fiscal.

In the replacement market, he said the company has clocked "double digit" growth without sharing absolute numbers.

On the outlook for the ongoing fiscal he said,"Definitely in the export market we will register almost about 50 per cent growth. In domestic market also we are expecting 12-14 per cent growth."

These will basically offset loss of sales in the OEM segment, he said adding "OEM has come down from about 32-33 per cent last year to about 20 per cent this year."

Agarwal said the company has also gained from anti-dumping duties imposed on Chinese tyres in the US, which is "a very important market where we have expanded our distribution network with specific products launched for the market".

Also, in the domestic market Chinese imports have come down substantially in the last couple of years due to anti-dumping duty and anti-subsidy duties, which was levied last year thereby helping domestic manufacturers, he added.

"In this year this (Chinese imports) will go down by around 3-5 per cent," he added.

On the outlook for fiscal 2020-21, he said,"We are seeing green shoots in the auto sector...OEM segment will come back and this will pick up. We will continue to focus on the segment of exports and replacement market in the new financial year as well."

On the export front, he said JK Tyre has been focussing on Europe, the US and some of the Middle East markets which will help it in further increasing overseas shipments.

The company has also started making groundwork for plans to enter Africa, which is still a bit away, Agarwal added. PTI RKL ANU

First Published Date: 07 Jan 2020, 15:08 PM IST
Recommended for you
View all
Shopping Bag Shop Now
55% OFF
SOFTSPUN Microfiber Cloth - 4 pcs - 40x40 cms - 340 GSM Grey- Thick Lint & Streak-Free Multipurpose Cloths - Automotive Microfibre Towels for Car Bike Cleaning Polishing Washing & Detailing…
Rs. 269 Rs. 604
19% OFF
Involve Your Senses One Musk Organic Car Perfume, Involve Your Senses Strong Fiber Air Freshener to Freshen'up Your Car - IONE01-40 g,Car Accessories interior car perfumes and fresheners
Rs. 324 Rs. 399
73% OFF
pTron Bullet Pro 36W PD Quick Charger, 3 Port Fast Car Charger Adapter - Compatible with All Smartphones & Tablets (Black)
Rs. 349 Rs. 1,299
13% OFF
Jopasu Car Duster
Rs. 755 Rs. 869

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking "View Offers" you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city