India to play big role in placing Maxxis Tyres among top 5 tyre manufacturers by 2026
Gurugram-based Maxxis Tyres inaugurated its 22nd plant in the industrial town of Sanand in Gujarat recently. Spread over 106 acres, the plant has an initial capacity to roll out 20,000 tyres and 40,000 tubes daily. Of the planned investment of Rs 2640 crore in phases over the next 3 years, nearly Rs 1800 crore has been spent. Targeting15% market share in India in five years, the company is going full steam ahead based on the learnings gathered in the past 5 years. In an interview with Bhargav TS, Jia-Ciao Liou (Gary), Commercial Head, Maxxis Rubber India Pvt Ltd said, “We have a vision to be among the top 5 tyre manufacturers by 2026, and the Indian market will play a significant role in achieving our corporate goal.” The excerpts:
Q: How significant is the new plant for Maxxis Tyres globally?
Gary: This is our 22th plant in the world and India is a very exciting market as it is the fastest growing two-wheeler market in the world. To be a part of this great journey is of prime importance for us. We have a vision of getting into top 5 tyre manufacturers by 2026 and the Indian market will play
Q: In what terms you wish to be number 5?
Gary: It has to be in terms of revenue. Tyre industry releases ranking every year according to which now we are at number 9.
Q: What is the contribution you expect from India?
Gary: We hope a lot and this is very hard to say. Globally also we are growing across many markets. We are also expanding our product-line as well. But we have identified India as a key growth engine for our company as India is important for growth in the world market. So being a part of this is the most important milestone for our company.
Q: You said that the initial capacity will be 20,000 tyres, how will it be distributed among the OEMs and aftermarket?
Gary: Rather than equally distributed, it should be more in the aftermarket. But we are working with various companies to expand our presence in the OE business as well.
Q: What about the aftermarket distribution channel you are looking at in India?
Gary: As of now we do not have a set number that how many distributors we want in India. But we want to find a partner in each market. Depending upon the scenario, sometimes we have to see a State as several markets, and sometimes we combine a couple of States into one market. We have to find a partner who is willing to grow with the brand, share our company values and accept new challenges of bringing in a new brand into the market and expanding that.
Q: In terms of technology, how unique are tyres from Maxxis? You shared about the rolling resistance. But without proper roads, reduced rolling resistance will not be of much help? How do you view this?
Gary: Fuel efficiency is a concept not only for the vehicle but for the tyres as well for saving the environment. There are many challenges to reach that goal, but we can’t stop there. We have to make ourselves ready and when the environment is ready, our product is also ready to cater to the environment and bring some change into the market and even improve it. We have to be ready ourselves at the forefront of all the technological developments.
Q: The Indian tyre manufacturers are facing many challenges in terms of temperature, cut resistance, and adding to the steerability with each contradicting the other. So how do you see this, and are you working on it?
Gary: There is no perfect tyre for all the scenarios, but we can make the best tyre for every scenario. It is according to the problem you want to target, and you want to eliminate, and then Maxxis can offer different products for different scenarios, that will suit your needs the best and bring more value to your purchase.
Q: You started with Honda Motorcyles and Scooter India (HMSI), what would be your game plan
moving forward? Will it be the global OE route or targeting Indian OEMs directly?
Gary: Definitely we will be targeting all the OEMs in India, and we want to work with all the partners to develop our new products for them. This is one of our key strategies for Maxxis to gain more and more presence. In the African market as well, Maxxis took time to build up and it did not build up overnight as it is not an easy thing. But step by step we have to follow our road map for the target market. Both OEMs and aftermarket will play very key roles for the growth of Maxxis.
Q: Do you have any order on hand in India?
Gary: We have a very prominent customer, HMSI, and Maxxis has been selected as the original equipment tyre supplier to India’s number one selling model, Honda Activa, since 2015. We currently serve as an OEM tyre supplier to HMSI, Maruti Suzuki, Mahindra, Tata Motors and Jeep in India. We are in talks with 3-4 OEMs and working on various projects.
Q: Compared to the mature markets, where does India stand in terms of safety? Hardly anybody looks at tyres as a safety component, though it is.
Gary: Safety is the bottom line, and tyre is the only thing that keeps you away from ground. It takes all the hits from the rough surfaces. safety has to be educated, starting with very simple aspects like checking your tyre pressure periodically, checking your tread depth regularly, all these are awareness of safety that will save lives.
Q: One key aspect to be looked at is the road tyre noise. What are the components that attribute to that and are you working at any new concept to reduce the noise from tyre?
Gary: Noise is a key factor with respect to comfort, so we have a different product line also that is specially designed for that. But in two-wheelers it is not of prime concern, and more so in the fourwheeler segment.
Q: Can you take us through your R&D facility? You have been here for the last 5 years. What kind of learning did you have and what have you referred to the R&D team?
Gary: The first step we have to establish is the condition here, whether the tyre will be used in the sub-zero degree or more than 50 Degree C. The terrain in India is very diversified, so to design a tyre to meet all those challenges is the most important consideration for any tyre manufacturer. During the past 5 years, we have studied the market thoroughly along with the vehicle availability in India, as the tyre can perform at the best if they are matching with each other. After these 5 years, all I have to say is that we are ready to roll out our products for India which are ‘Made in India’.
Q: You have developed products for the Indian market, where price and quality are very important. Everyone
wants everything but at less price. How do you manage?
Gary: I won’t say this scenario is only existing in India. It is all around the world. Everyone wants to have the best value for the price they pay. I will say it is pure human nature. We have been selling our tyres in nearly 180 countries, so have an experience of our tyres rolling on in all those different situations and climate. This has made us stronger to cop up with the diversity that exists in India, like the demand for higher value for the products the customer has paid for. So we are very confident in bringing our product to face these challenges. Our USP at Maxxis Tyres is that we give the best warranty policy of 5 plus 1 year in the industry, this means 5 years of unconditional warranty from the manufacturing team, and 1 year of free tyre replacement. Within one year after the purchase date, if you face any problem, are not satisfied, or the tyre becomes unusable, we will change it with a new tyre. We are giving such high warranty because we are very confident of our product quality and we know we can bring the best value to the customer.
Q: What kind of manufacturing challenges you foresee in India and how are you planning to overcome them?
Gary: In India, different States have different set of challenges. Some States have huge union problem, even up to 3 unions in 1 company. One of the best things in Gujarat is that such problems are not visible. People here work very hard and we can come to an agreement with our employees on how to make better products.
Q: It is a greenfield facility that you have set up here in Gujarat. So what kind of learning have you collated from your 21 factories across the world and brought in for this 22nd project?
Gary: Every new factory gets improvements and this factory has all the lessons and improvements from the previous factories in Thailand, China, Indonesia, and Taiwan. We have brought in the latest technology, and the best manufacturing equipment to India. Here we have been sparing no cost on R&D and infrastructure investments.