JK Tyre & Industries, one of India’s largest tyre manufacturers, is recovering from sluggish demand and subdued growth due to a strict lockdown that restricted economic activity across the country. The effect of the lockdown shows in the company’s quarterly results. JK Tyre & Industries reported 34.6% drop in consolidated net profit at ₹109.68 crore for the second quarter ended September 30, 2020, compared to ₹167.70 crore in the corresponding period last year.
The company is hoping that the market could now benefit from pent-up demand leading to some growth in goods and transport mobility. Anshuman Singhania, managing director, JK Tyre & Industries, spoke to Fortune India about the changing post-Covid-19 world, and the company’s road to recovery. Edited excerpts:
What are some of the trends that will govern the post-Covid-19 world?
The new post-Covid-19 normal has created a significant macroeconomic shift and redefined global markets. The shift towards wellness has triggered evolved consumer behaviour, entailing emergence of digital engagement as a key trend. In addition to accelerated technological adoption, rapid innovation and personalised consumer outreach have gained significant prominence. The recent shift observed in mobility trends also encompass these changes. For instance, while consumers are now finding comfort in vehicle ownership, given the preference towards personal and connected mobility, they are opting for convenience of online buying, at-home delivery, and a more informed and personalised buying experience. For companies and businesses, digital integration with innovative and purposeful product offerings has now become quintessential in the new normal.
You recently launched ‘smart tyres’. How is it different from other products in the market?
JK Tyre’s smart tyre range is reflective of the company’s unwavering focus on technological innovation and excellence. The company’s commitment to enhanced efficiency and durability by way of disruptive tyre solutions is central to this innovative product. The new range is equipped with Tyre Pressure Monitoring System (TPMS) technology and offers real-time assessment of tyre health, with continuous monitoring and data recording. JK Tyres’ smart tyre range enables the user to remain connected with the tyres in this era of connected mobility. Extending the benefits from operational cost saving for commercial fleet partners, this technology is being widely appreciated by the passenger vehicle and motorcycle segment, given the convenience of being informed about the health of the tyres beforehand.
Could you throw some light on the emergence of digital in a post-Covid-19 world?
As stated earlier, we are witnessing a lot of people adopting digital solutions in the new normal. Customers are increasingly inclined towards e-commerce since it enables contact-free operations from selection to purchase to acquisition. In a call to action, given the evolving e-commerce market space, we have collaborated with Amazon India to offer our entire range of premium products. It is our concerted attempt to deliver the buyer community a seamless purchasing experience, while simultaneously ensuring their safety. In addition, the use of digital technology in strengthening the back-end processes in sales, manufacturing, and supply chain has yielded results.
But can digital replace things like say, a physical dealership, as people still like to touch and feel the product? How do you work around this?
The evolution of market spaces is a constant dynamic. E-commerce platforms, too, with emerging trends will see changes in processes in order to provide a seamless buying experience. However, the need for touch and feel before the final purchase will always linger and influence the buying decision. Thus, the time spent for physical selection and shortlisting may reduce, but there will always be a need for a physical inspection—at least in the final stages of shopping. We at JK Tyre follow a customer-first policy, under which we have deployed all safety measures at our entire dealership network. Propagating a safe environment for our customers, all our brand showrooms and dealerships adhere to all safety protocols to ensure safety such as contactless service, digital payments, and regular sanitisation of machinery and vehicles etc.
What’s your outlook for the forthcoming quarters?
Registering domestic growth at 12% with strong double-digit numbers from farm, aftermarket, and export segments in the quarter gone by, we at JK Tyre & Industries are anticipating sustained positive sentiment in the coming quarters. Having achieved these results despite the trailing commercial segment, we expect it to gain further momentum once this sector too picks up, especially the demand from OEMs. Replacement and exports are likely to remain buoyant.
Rural markets were a major part of your growth story until a few months before the pandemic badly hit this market. Is it still going to be a major focus going forward?
Rural market and replacement sector have been the key growth drivers for Indian tyre industry and we continue to relay our focus on these segments for the foreseeable future. We also continue to direct our efforts towards export markets that has resulted in good numbers, that is ₹337 crore during Q2FY21. We are also focussing on updating our product portfolio to cater to our export needs.