“We have a lot of tailwinds with us,” says Rajiv Poddar on BKT Tyre’s debut in the consumer segment

BKT Tyres is an established name in the off-highway and agricultural segment, and the Indian company recently announced that it would be entering the consumer segment with its range of on-highway tyres for commercial vehicles, as well as two-wheeler tyres for both scooters and motorcycles. To gain more insights about BKT Tyres’ future plans, we had a conversation with Arvind Poddar (chairman and managing director) Rajiv Poddar (joint managing director) and Satish Sharma (senior president and director – business development and strategy) from BKT Tyres on the sidelines of their launch event.

When asked about why BKT Tyres chose to begin its consumer journey with these particular segments, Satish Sharma said, “We are starting both with motorcycles and scooters, and we wanted to start with the volume range was because we had to marry it with our go to market strategy, and we had to establish that two-wheeler is all about reach. And that reach and our distributor go to market model can marry with each other. That was the primary reason for the way we chose the first segment to attack. Sharma went on to add, “We will also very soon come and do the motorcycle radial tyres, for which the plant is getting ready. A few months from now, that is the product that we are going to launch.” He further clarified that these tyres are EV-ready as well.

When asked about aspirations in terms of market share, Sharma said that the aim is to achieve 5 per cent market share, adding that “But the choice of the number and the speed of the progress is dictated by the market. So, let's hope for the response, we have to test the waters and then figure it out. Of course, we have numbers in mind. But we've given you the terminal number, and let's see the progress in the intermediate stages.” Arvind Poddar added to this, saying, “We have built the reputation for BKT worldwide in the off-highway (segment), including India. Now once you reach a certain level, growth will be limited. There will be growth. It's not that there is not going to be, but our habit has become bad, we are always looking for high growth. So, when we were discussing with Mr. (Satish) Sharma, we realised that good growth can come if we complete our range from off-highway to on-highway.”

Poddar went on to elaborate, “If we go back into our history, when we launched our product in India, particularly in agriculture, it was overcrowded I would say. How to penetrate? We discussed internally that we have to be in India, we cannot ignore India. So how are we going to enter into the Indian market? We discussed with our marketing team, with our core team, with our technology, that we have to develop something different, unique for the market. We studied for around 6 to 9 months about what we can develop. We came up with some ideas that if we do this, definitely we can penetrate into the Indian market. That's on the product development side. Second is that everybody, if you look at each and every player, whether big or small, they always sell the product through a dealer or a retailer. Since we were coming from the international market, we were the first ones to move through a distributor. These are the two differentiations that we’ve done and we penetrated, and I would say today, in the agricultural market of India, we have over 20 per cent (market share). I know there is overcrowding, but the market is growing in the B2C segment, whether it is 2-3-wheeler or whether it is a passenger car or I would say in commercial vehicles.” Speaking on BKTs objectives, Poddar reiterated, “First is quality, second is the distribution, and third is the growth which is happening in India. And we are quite confident that this 5 per cent, internally, we are looking at to reach 28-29 per cent.”

When asked about further investments, Rajiv Poddar said, “We have already announced our capex (capital expenditure) of about ₹3500 crores, which will be split across all the verticals, but mainly towards the B2C because that is the new vertical which is being set up. And as per the announced timelines, it was supposed to be spread over three years. We are already about one year into that. Over the next 15 to 18 months, the balance will also be spread.” We also asked Poddar about how BKT Tyres aims to communicate their product in the consumer segment, to which he replied, “When we got into the off-highway space in India, especially on the agriculture side, it was crowded. So, it's not something that we are not used to. We have the tailwinds already there. There's a brand recall there. There's a brand recollect in the off-highway space, so it's an extension to that. The product is similar. It's round. It's black. Of course, it has its own nuances, which we are going to adapt to. But we have a lot of tailwinds with us. As far as the competitive market space of on-road is there, we are willing to adapt to that. We are going to try and bring a better product to what we feel is present. We are aiming to get the best quality in the product distribution. And along with that, we'll be doing a lot of activity on brand promotion. We'll be doing a 360-degree brand communication to reach out to the end users. So that's all part of our strategy. And it's going to be a journey. I don't think we are here to look at anything in the short term. It's going to be a long-term sort of a reach. Even our vision is for the next four to five years where we aspire to reach 5 per cent (market share).”

As we neared the end of our conversation, Poddar stated, “Of course, we would like to go beyond that (5 per cent market share). But it's a conservative approach that we'll be taking. We'll be establishing a strong foundation, creating a strong distribution network, creating a good high-quality product recall, with the branding activities to support it. So, the foundation will be set up, which will be strong, and then the growth can be multi-fold. We have manufacturing excellence, product knowledge, the technical design aspect which we are improving, and we’re bringing the brand recall, the brand value, and coming together and propel that whole project.”