Leading two- and three-wheeler tyre maker TVS Srichakra plans a capex of ₹160 crore. The capital will be used to expand its production capacity — in view of favourable growth outlook in the domestic two-wheeler market — as also to beef up its exports.
“We are planning to expand our capacities at our Madurai and Pantnagar (Uttarakhand) factories. We will increase the total capacity from 2.3 million tyres a month to 2.5 million,” P Vijayaraghavan, Director, TVS Srichakra Ltd, told BusinessLine .
After two years of strong growth, the two-wheeler industry slipped into a very low single-digit growth in 2015-16, he observed.
“While the scooter market maintained the strong growth momentum in the previous fiscal, bike sales were hit. But we expect a better year for two- and three-wheelers this fiscal. Higher rural allocation in the latest Union Budget and favourable monsoon prospects would spur the sales of motorcycles this year, thereby helping the growth of the overall two-wheeler market. We expect the two-wheeler industry to grow 7-8 per cent this fiscal,” he added.
The company’s association with the Gujarat Lions as a principal sponsor in the ongoing IPL season has paid dividends by way of improved sales in the after-market across regions, said Vijayaraghavan. The IPL team association is part of its brand building exercises that the company has been executing over the past two years.
Meanwhile, Srichakra, which posted a strong performance for FY16, is also preparing to launch its radial tyres for premium bikes shortly. It will be joining a few other Indian tyre companies that have come out with such products on the back of growing sales of above-250 cc bikes in the country.
“We will launch the new radial tyres for bikes for the after-market category though it is meant for both OEM and after-market. We have already completed trials and tests,” said Vijayaraghavan.
The Madurai-based company, which exports mainly off-the-road tyres, also looks to export more two- and three-wheeler tyres in view of the growing potential in the African and South American markets. The company caters to about 75 countries, and exports make up about 15 per cent of its revenues.