Indian Kesoram Industries to produce passenger car tires

After about three years of searching for a partner to participate in the passenger car tire business, the leading company of the Indian BK Birla Group - Kesoram Industries - has decided to make a solo debut in September 2019.

After cement and viscose, tires are Kesoram Industries' third profile production since 1991. The current target is a double-digit growing domestic market.

P. Radhakrishnan, CFO of Kesoram Industries, said the company will rely on the value of the Birla Tyres brand in its work. Its dealer base and the potential of the tire market were decisive factors.

“The local tire market, valued at over US $286 million (Rs 2,000), is expected to grow exclusively at double digits. We are focused on the after-sales service market and by the second quarter of this fiscal year we will launch tires for passenger vehicles, ”P. Radhakrishnan said.

At this stage, Radhakrishnan avoids signing any contracts with car manufacturers. He believes that for Birla Tyres the aftermarket will provide strategic opportunities at an early stage.

Initially, tires for Kesoram Industries will be produced by other companies under the contract, since the plant under construction in Balisor is only 85% ready and its launch is scheduled for December 2019. Negotiations are underway with several local manufacturers. Contract manufacturing will help the company not only quickly enter the passenger car tire market without significant short-term and capital investments, but also understand the reaction of buyers.

“Apart from the domestic market, there is also a significant export market in the European Union (EU) and Canada. Wherever Chinese companies are in this space, it is a potential market for us as well. In the first year of operation, we intend to occupy about 10% of the market, ”added P. Radhakrishnan.

In parallel, another Indian tire manufacturer is making strides not only in the aftermarket but also in the OE segment, with CEAT approved for the Hyundai Venue subcompact SUV and Suzuki Alto 800 hatchback.