Tyre maker Ceat is venturing into North America as it aims to generate a quarter of its revenue outside India in the next few years.
Arnab Banerjee, Chief Operating Officer and Whole Time Director, Ceat, told BusinessLine, “We want 25 per cent of our business to come from international markets in the next 3-5 years. Right now, the share of exports is 17-18 per cent.”
Mumbai-based Ceat is India’s fourth-largest tyre maker by tonnage. It is targeting markets in Europe, the US, Canada, South America, Australia and New Zealand for its car radials, truck and bus radials, two-wheeler tyres and tyres for agriculture machinery.
“These markets are high-margin and highly profitable. In PCR [passenger car radials] we have a pan-Europe network since the last 6-7 years. We are now getting TBR [trucks and bus radials] to Europe and, after that, we will get two-wheeler tyres. In the agriculture machinery segment, we already have a significant presence and that should grow exponentially,” Banerjee added.
During April-September FY22, export revenues accounted for 19 per cent of Ceat’s turnover, up from 14 per cent in the same period in FY21. With a presence in over 100 countries, export revenue grew 45 per cent in the first half of FY22.
Last year, Delhi-based Apollo Tyres ventured into the US and Canada market with its commercial vehicle (CV) range. While Apollo launched CV tyres under its brand in the US and Canada, it used the premium European brand Vredestein for the passenger vehicle range.
Ceat will stick to its brand, but might use some of its sub-brands that are present in Europe.
“Our European range is not sold in India, and the US range will be different from the European range. We have the Ceat Ecodrive brand in Europe, which is not there anywhere else in the world. We have winter tyres sold in Europe. The tyres for the US will be different than European ones but we can look at having the same sub-brands,” Banerjee added.
Ceat will cater to these markets from its manufacturing plants in India, and later set up warehouses in the target markets. The RPG Group company has six manufacturing plants in India.
“In the US, we would be in the mid-premium category. The revenue share of developed markets in our total exports will be more than 60 per cent, and in terms of volumes it will be about 20-23 per cent,” Banerjee added.