METs Institute of Management

Final Project Report on

TO EXPLORE THE UPCOUNTRIES FOR TYRES & FIND THE TYRE MARKET POTENTIAL IN THE RAIGAD DISTRICT

Project submitted in partial fulfillment of the requirements for the award of the degree of MASTERS IN MANAGEMENT STUDIES MUMBAI UNIVERSITY

Submitted by Shivanand Chavhan MMS Marketing 013

METS INSTITUTE OF MANAGEMENT BANDRA

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MET Institute of Management Acknowledgement

I, Shivanand Chavhan (013) from MMS-Marketing am submitting the Final Project Report . It basically captures the exploration of untapped tyre market for Goodyear tyres company across the various places in districts of raigad and in the western suburbs. My project guide was Ms Niyati Nagpal, Sales manager,Mumbai,Goodyear India I would also like to extend my heartfelt thanks to Mr Sudarshan shetty & Mr Parag kamulkar ,Area sales executive for all the support they extended. Also, thanks to all the dealers whom I interacted with during the course of the project I would hereby like to acknowledge the skills and knowledge along with the experience that I have gained from our guide during the course of the project and I really appreciate the entire staff too of Goodyear Tyres for helping us out whenever required. Hereby, I assure that all the information from this final project report will always remain private & confidential and would not leak under any circumstances. I would also like to thank Mr. D. M. Marathe from MET MMS for his kind co-operation and support throughout the project.

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Table of Contents
Serial No. Summary The Indian tyre industry Goodyear -An over view Goodyear India Business in India Project title a b c Objectives of the study Methodology adopted Road map of the project Market share of tyres industry in India Questionnaires Data collection Market survey tools Data collection of targeted areas Other findings Data analysis of targeted areas Limitations and Conclusion for study References 11 12 13 14 15-17 18 19 21-26 27 28-29 31 32 Topic Page No. 4 5 6 8 10

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Summary
The tyre industry has evolved from the more basic cross ply to the more sophisticated radial tyres. Nylon cords that impart low weight and additional strength to the tyres have also replaced Cotton ply. This industry is strongly linked to the automobile sector. This industry is also driven by agricultural and infrastructural activity that takes place in the region, as these two have an impact on the transport sector. The global tyre market currently is estimated at USD 70 billion while the Indian market is around Rs. 100 million. The global market is dominated by Goodyear-Sumitomo with a share of 22%. On the other hand, the domestic industry is dominated by MRF Ltd. Several mergers and acquisitions have characterized the global market, in the recent past. This is essentially to acquire technology, gain wider access to markets and be competitive. Indian players are also reengineering their businesses and looking at strategic tie-ups in this segment.

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THE INDIAN TYRE INDUSTRY

An Introduction to the Indian Tyre Industry The Rs.20,000 crore Indian Tyre Industry, is highly raw material intensive and predominantly a Cross Ply (or Bias) tyre manufacturing industry. It is highly concentrated wherein 10 large manufacturers account for over 95% of the total tonnage production of 11.35 lakh M.T. It produces all categories of tyres, except Snow Tyres and Aero Tyre for which there is no demand domestically.

Key Influencers The level of economic activity, performance of domestic automotive industry, and the faring of the transport sector directly influence the performance of the tyre industry in India. With the replacement segment dominating the overall tyre demand, the industry remains inherently vulnerable to economic cycles. While radialization has become the norm in the passenger car segment, in the bus and truck tyre segment, its acceptance is still limited. Bus and truck radialization could emerge in the long term as the quality of roads improves and the restrictions on overloading are better enforced. The practice of re-treading, which is gaining increasing acceptance, could pose a challenge to replacement demand in the medium term. The ability of the re-treading sector to capture potential replacement demand would depend on the awareness among customers (of the benefits of retreading) and also the quality of retreading done. Given the low levels of penetration of two-wheelers and passenger cars in the country, OEM demand is likely to increase, which in turn would push up replacement demand with a lag. Slowdown in automotive industry and global economy in general negatively impacted the Indian tyre industry in 2009. The industry tonnage growth was only 2.19% during first nine months of FY 2009, compared to 7.38% growth experienced during the same period last year. Demand side was also severely affected as almost all auto manufacturers were forced to adjust their production last year. A major relief for tyre manufacturers was provided by the government by reducing the excise duty on tyres from 14% to 10% in December 2008, and further to 8% in February 2009 5

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Role of Marketing Over the years, tyre manufacturers have developed a vast marketing network using dealers and Depots and as such all types of tyres are now easily available even in the remotest corners of the Country. No doubt, international auto majors in India now roll out their vehicles using Indian Manufactured tyres.

Sales and Profitability The Indian Tyre Industry produced 821 lakh units of tyres garnering approximately Rs. 21,000 crore in FY 2009 -2010. The top players are now focusing on branding their products and strengthening their distribution network so as to increase their market share. The industry derives Its demand from the automobile Industry. While the OEM (Original Equipment Manufacturers) Market off take is dependent on the new vehicle sales, replacement market demand depends on the total population of vehicles on road, road conditions, vehicle scrapping rules, overloading norms for trucks, average life of tyres and prevalence of tyre retreading.

Current Status & Future Trends As regards to the demand scenario, the poor demand growth in FY 2009 - 2010 was primarily on account of decline in OEM production. Continuation of poor volume growth could affect the profitability further. Despite these challenges, according to CARE (Credit Rating & Research) Ltd., while the industry may register a low tonnage growth in FY 2009, the long term prospective seems to be bright. They expect the industry to experience a CAGR of approximately 8.21% between FY08 to 6

METs Institute of Management FY13. Automotive companies have started experiencing increasing sales and raw material prices are stabilizing which will boost tyre sales over the coming months.

Goodyear Tyres- An Overview

The Goodyear Tire & Rubber Company was founded in 1898 by Frank Seiberling. Goodyear manufactures tires for automobiles, commercial trucks, light trucks, SUVs, race cars, airplanes, and heavy earth-mover machinery. Although the company was not connected with him, it was named in honor of Charles Goodyear. Goodyear invented vulcanized rubber in 1839. The first Goodyear Tires became popular because they were easily detachable and low maintenance. Goodyear is very famous throughout the world because of the Goodyear blimp.

The first Goodyear blimp flew in 1925. Today it is one of the most recognizable advertising icons in America. The company is the most successful tire supplier in Formula One history, with more starts, wins, and constructors' championships than any other tire supplier. They pulled out of the sport after the 1998 season. Goodyear is a former component of the Dow Jones Industrial Average

Type Industry Founded

: : :

Public (NYSE) Manufacturing Akron, ohio, 1898 Akron,ohio,U.S Tires 7

Headquarters : Product :

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Goodyear - India
Goodyear's presence in India is over 80 years old, with two plants, one each in Ballabgarh and Aurangabad. A chronology of Goodyear's continued success in India is as follows:

1922: Goodyear tyre and Rubber company Akron, Ohio entered the Indian Market.

1961: Goodyear India's own manufacturing facility was inaugurated in Ballabgarh, 32 kms from Indias capital New Delhi .The plant had an investment of US $12million and was commissioned within 12 months. 1965: The Ballabgarh plant was expanded which increased the plant production by 35% 1969-70: The production increased by nearly 100% 1993: Goodyear formed a 50-50 joint venture with South- Asian Tyres Ltd. (SATL) at Aurangabad to manufacture state-of-art radial tyres for car and light truck and bias construction tyres for graders and earthmovers. 1996: The first tyre GPS2 radial Passenger was rolled out from Aurangabad plant 1998: SATL becomes a fully owned Goodyear Company 1999: A significant investment of 9.3 MM USD was made in the farm tyre manufacturing process. 2002: Goodyear becomes the first tyre manufacturer to roll out tubeless tyres on Indian roads. In the passenger car segment, Goodyear supplies tyres to many of the leading Original Equipment Manufacturers in India. These include Maruti, Telco, Mahindra & Mahindra, Ford, Fiat and many more. Goodyear India has been a pioneer in introducing tubeless radial tyres in the passenger car segment.

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In the farm segment, Goodyear tyres are supplied to all the major Tractor manufacturers like PTL, ITL, TAFE, Eicher and Escorts. Similarly, for buses and trucks, vehicles rolling out of the assembly line of the leading OEMs like TELCO, Ashok Leyland, and Swaraj Mazda are often seen with Goodyear tyres. Goodyear commands a major market share in the Off the Road (OTR) segment by being a major supplier to Coal India Limited, Escorts, L&T, TISCO and major steel plants of the country. 2004: A very significant year with three product launches including GT3, Eagle F1 and Ducaro GA.

2006: Launch of branded retail shop-in-shop concept a part of the companys strategic initiative in organized tyre retailing, aimed at strengthening its presence in the large tyre replacement market

in the country. These outlets will offer customers an unmatched tyre purchase experience.

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Business in India

Goodyear Indias principal business is the development, manufacture, distribution and sale of tires and related products and services worldwide. We manufacture and market numerous lines of rubber tires for:

Automobiles trucks buses aviation motorcycles earthmoving and mining equipment industrial equipment, and various other applications In each case, our tires are offered for sale to vehicle manufacturers for mounting as original equipment (OE) and for replacement worldwide. We manufacture and sell tires under the Goodyear, Dunlop, Kelly, Fulda, Debica and Sava brands and various other Goodyear owned house brands, and the private-label brands of certain customers.

In certain geographic areas we also:

retread truck, aviation and off-the-road, or OTR, tires,

manufacture and sell farm tires manufacture and sell tread rubber and other tire retreading materials, provide automotive repair services and miscellaneous other products and services, and manufacture and sell flaps for truck tires and other types of tires

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METs Institute of Management Our principal products are new tires for most applications. Approximately 87.1% of our sales in 2008 were for new tires, which is consistent with 88.6% in both 2007 and 2006.

Project title To explore the up countries for tyres & to determine the tyre market potential in the district of raigad and northern railway suburbs

Objectives of the study-

1) To determine the tyre market potential in the various regions of raigad districts and also in the northern railway suburbs

2) Tapping the market potential by exploring new tyre dealers

3) Gaining access to the information in the areas on tyre market

4) Determining other tyre brands available with the new tyre dealers

5) Briefing about Goodyear tyres dealing process in case required

General objective is to find out various steps, needed to be taken for increasing the market share of Goodyear tyres in the outskirts of the Mumbai region .

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METs Institute of Management As the analysis will consists of finding the competitor s, product specifications, dealer network, and number of outlets, schemes offered to the customer, margins to dealers etc will help the company to analyze the market more efficiently and thus implementing the future strategy

Details of the methodology adopted

Proposed methodology: Covering details about new tyre dealers ,data collection method, rough draft of schedule,questionnaires,data analysis

1) Recognizing the target market area in the district of raigad & northern railway suburbs to be visited for the purpose of new tyre dealers exploration

2) Scheduling a visiting plan for the areas targeted

3) Exploring the new tyre dealers in the area visited and getting access to the tyre market information

4) Collecting information from the new tyre dealers regarding their tyre purchasing capacity and monthly sales in all RIM segments of tyres

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A road map of the entire project

Target area in Raigad districts 1)Alibaug 2)Pen 3)Srivardhan 4)Wada 5)Mahad

Target area in northern suburbs 1)Virar 2)Palghar 3)Boisar 4)Dhanau 5)Shahpur 6)Murbad 7)Khopoli

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METs Institute of Management Overall view of the market share of all the tyre companies in India in 2007

Market share
5% 7% 10% 4% 22% MRF Apollo J.K tyres Ceat Birla 13% 21% goodyear Bridgestone others 18%

Major players include MRF Ltd which is the market leader (22% market share) followed closely by Apollo tyres (21%). The other major players are J.K tyres industries and Ltd (18%). Ceat Ltd (13%) , Birla Tyres (10%), Goodyear Tyres (7%), and Bridgestone (5%) On an average, 55% is for the production of replacement market, followed by 29.8% sold to OEMs directly and the remaining is exported.

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Questionnaires used while collecting the data

1) Name : Address:

Mobile no :

Landline:

1)

Have you heard about Goodyear tyres ? a) Yes b) No

2) What are your monthly tyre sales?

____________________________________

3) Which kind of tyre Rim segments units like 13, 14 you have?

_____________________________________________

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4) How many outlets you have in this or any other area?

_________________________________________

5) How many tyres you purchase on a monthly average?

_______________________________________________

6) Which tyre brands you have with you?

_____________________________________

7) Would you like to have Goodyear tyres dealership? Yes No If no, reason

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8) If you want dealership with Goodyear tyres what are your expectations?

______________________________________________________

9) Do you purchase tyres from any retailer or directly from the company?

________________________________________________

10) How is the transportation of tyres in your area ?

___________________________________________

11) Which other tyre brands dealership you posses?

_____________________________________________

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12) What kind of complaints you receive from your customers?

_________________________________________
13) Which tyre brands complaints you have faced to maximum extent?

_______________________________________________

14) How is the demand for tyres in your area?

______________________________________________

15) Have you faced with the problems of out of stock anytime?

______________________________________________

**** Thank You ****

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DATA COLLECTION
Data Collection for this project was the most important aspect. All results are based on what data is actually collected. The following is the basis of data collection: What is data collection? Data collection is simply how information is gathered. There are various methods of data collection such as personal interviewing, telephone, mail and the Internet. Depending on the survey design, these methods can be used separately or combined. The Data Collection Methodology team (DCM) advises on data collection methods for all business surveys and the Census. DCM advises on a diverse range of surveys. To do this the team assesses the various survey processes at the data collection stage. Aims DCM contributes to the development of a common statistical infrastructure for surveys. The team aims to provide business areas with methodological standards and expert advice on procedures to minimize error, in order to produce accurate survey estimates and thereby maintain the quality of data output. DCM is also involved in ongoing research to assess and improve methods of data collection, and in developing new ways of collecting data,

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Various MARKET SURVEY TOOLS that I used for data collection are: 1.) Observations 2.) Interviews 3.) Questionnaires 4.) Discussions

Observation Observation was generally based on the overall view of the area, concentration of 4 wheelers in the area,tyre dealer distance from the city. what I found was in many areas the availability of the tyre dealers were on the main highway road or in some places they were situated in the centre of the city.

Interviews Interviewing the tyre dealers gave us excellent knowledge about the know-how of the tyre market industry and how it works. The tyre dealers whom I interviewed they all said that all the available brands at their outlet were doing good business. As such many a times it happened to be the tyres were out of stock. They gave us a general idea about the supply chain, and also the various margins and profits involved

Questionnaires I formulated various questions for target consumers: Open ended questions which break the ice when the surveyor does not all the possible answers Close ended questions to collect the data and when all choices are known and quantitative statistical results are required. Multiple choice questions 20

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Certain other important things were kept in mind while formulating the questionnaires: I measured only one thing at a time. I ensured that the question was not too intimidating. Also balanced scales questionnaire used. I assumed that consumers would not know answers to very specific questions. I avoided using abbreviations and unnecessary norms. I maintained logical progression in the ordering of questions.

I chose the survey method because

To identify customer requirements or preferences. To assess customer satisfaction, such as identifying or prioritizing problems to address. To evaluate proposed changes. To assess whether a change was successful.

Periodically, to monitor changes in customer or employee satisfaction over time

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Data collection of the targeted areas

1) Alibaug

Dealer Name

Location

Sai tyres New punjab tyres Wheel care centre Mhatre Autopart s Manoj traders

Alibaug Alibaug

Total Month ly Count er Potent ial (in units) 80 115

Potential of 12" RIM segment

Potentia l of 13" RIM segmen t 10 15

Potentia l of 14" RIM segmen t 10 30

Potentia l of 15" RIM segmen t 15 20

15 20

Potenti al of 16" and above RIM segme nt 20 20

Potentia l of LT 4*4 segmen t 10 10

Bridge stone

Good year

MRF

J K

Michelli n

Other

only MRF Ceat

Alibaug

150

60

30

15

15

15

15

Ceat

Alibaug

130

40

20

20

20

20

10

Birla

Alibaug

130

20

25

25

25

25

10

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2) Penn & Mahad

Dealer Name

Locati on

Total Monthly Counter Potentia l (in units)

Potent ial of 12" RIM segm ent

Potenti al of 13" RIM segme nt

Poten tial of 14" RIM segm ent

Potent ial of 15" RIM segme nt

Potent ial of 16" and above RIM segme nt 20

Potent ial of LT 4*4 segme nt

Bridgesto ne

Goody ear

MR F

J K

Apol lo

Michel lin

Oth er

Mahara shtra tyres Mahakal i tyres S.M tyres Maruti automo biles

Penn

90

15

15

20

15

Penn Mahad Mahad

65 75 50

15 10 10

15 15 10

10 15 10

10 15 10

10 10 5

5 10 5

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3 )Virar & palghar

Dealer Name

Locati on

Rajesh & Gosali Vinod goklani R.F Varaiy a Baiju Soman T Prakas h

Virar

Total Monthl y Count er Potenti al (in units) 80

Potenti al of 12" RIM segme nt 30

Potenti al of 13" RIM segme nt 20

Potenti al of 14" RIM segme nt 10

Potenti al of 15" RIM segme nt 10

Potenti al of 16" and above RIM segme nt 5

Potenti al of LT 4*4 segme nt 5

Bridge stone

Good year

MRF

JK

Apoll o

Michell in

Oth er

Virar Palgh ar Palgh ar Palgh ar

20 19

10 8

5 3

5 4 2 2 1 3 3 4 Cea t

43 96

13 20

20 15

10 10 5 6 40

25 4

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3) Boisar

Dealer Name

Locati on

Total Monthl y Count er Potent ial (in units)

Potent ial of 12" RIM segme nt

Potent ial of 13" RIM segme nt

Potent ial of 14" RIM segme nt

Potent ial of 15" RIM segme nt

Potent ial of 16" and above RIM segme nt

Potent ial of LT 4*4 segme nt

Bridgesto ne

Good year

MRF

J K

Apol lo

Michel lin

Other

D.C.T tyres Manoj tyres Mamta enterpris es Punmiya Tyres

Boisar

50

18

14

18

Ceat

Boisar

34

10

10

Dunl op

Boisar

70
60

15
20

20
10

12
15

10
10

10
5

Boisar

25

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4) Khopoli

Dealer Name

Locati on

Kishor automobi les Ankita automobi les Gazi tyres Patil tyres

Khopo li khopol i Khopo li khopol i

Total Monthl y Count er Potent ial (in units) 50

Potent ial of 12" RIM segme nt 25

Potent ial of 13" RIM segm ent 25

Potenti al of 14" RIM segme nt

Potent ial of 15" RIM segme nt

Potent ial of 16" and above RIM segme nt

Potent ial of LT 4*4 segme nt

Bridge stone

Good year

MRF

JK

Apol lo

Michel lin

Other

50

20

15

15

Ceat

140 150

30 30

25 30

30 25

20 25

20 25

15 15 only MRF

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5)Shahpur & Murbad

Dealer Name

Locati on

Shree balaji auto Siddhivina yak tyres Ganesh tyres Pramod tyres

Shahp ur Shahp ur Shahp ur Murba d

Total Monthl y Count er Potent ial (in units) 130 100 130 120

Potent ial of 12" RIM segme nt 20 25 25 30

Potent ial of 13" RIM segme nt 30 25 30 25

Potent ial of 14" RIM segme nt 20 30 30 20

Potent ial of 15" RIM segme nt 20 20 20 25

Potent ial of 16" and above RIM segme nt 20

Potent ial of LT 4*4 segme nt 20

Bridge stone

Good year

MRF

JK

Apollo

Mich ellin

Oth er

Cea t 20 30 5 only MRF

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OTHER FINDINGS

From the mentioned target areas 3 areas via Shivardhan, wada & solanpur showed as such no market potential for tyres due to non availability of tyre dealers some of the reasons for it were as follows

1) Areas not fully developed in terms for market

2) Areas are very much far away from the cities

3) Transportation a major problem

4) Very low concentration of four wheeler cars

5) Local people cant afford to purchase four wheeler cars

6) High concentration of two wheelers hence high potential for two wheelers tyre market

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Data analysis of the target areas

Data analysis is the most important part of any project. When youve collected the data, you need to analyze it too. As from above you can see the data collected from various places shows the tyre dealers and their monthly purchasing capacity in all different RIM segments of tyres for four wheelers The data can be analyzed with a graph showing the total monthly purchase of tyres for all the explored areas for tyre market

Analysis of tyre market potential for raigad district areas

700 600 500 400 Tyre purchasing Capacity 300 200 100 0 Alibaug Penn Mahad

In the above plotted graph you can see alibaug shows very high tyre market potential as compared to penn and mahad which shows very low potential. Hence targeting the tyre dealers in alibaug will be a

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very good step in increasing the market share in alibaug also penn and mahad shows very low potential so company might have to think on its strategy before targeting the dealers in these areas

Analysis of tyre market potential for northern suburbs

400 350 300 250 200 150 100 50 0 Virar Palghar Boisar Khopoli Shahpur Murbad Tyre purchasing capacity

In the above chart khopoli shows very higher potential for tyres followed by shahpur and boisar which shows little less compared to khopoli.Palghar shows little less than Boisar and Murbad show moderate demand for tyres.Virar shows least demand amongst all areas for tyres

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Limitations of the study The project will help the company to take future actions to increase market share, improve sales, building relationship with dealers and future schemes to be given, how to improve distribution network and the need for tie-ups with the local tyre dealers etc. The data collected from the dealers in the form of questionnaires will help the company to know the requirements of the consumers and make change in the sales plan accordingly.

Limitations were the authenticity of the answers given by dealers.

Conclusion

The analysis is done from the data collected from the field work which was assigned by the company. The data is collected from various dealers. The analysis mainly shows that the four wheeler tyre market for Goodyear India in most of the explored areas show 150 to 180 tyres potential and in future the potential for it is going to increase tremendously. Hence considering the current demand and trends, Goodyear India should plan its marketing strategy accordingly.

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References

www.goodyearindia.co.in www.wikipedia.org www.articlesnatch.com www.domainb.com/tyres

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