Continental looks to scale up PV biz to align with evolving customer needs
Tyre maker Continental is looking to expand its passenger vehicle and light truck tyres business in India, as it aims to focus on products catering to the robustly growing
utility vehicle segment
, according to a top company official.
The company expects strong growth potential in larger-inch and
ultra-high-performance tyres
designed for SUVs, 4x4s, and sporty vehicles, aligning seamlessly with current market trends.
The tyre maker has lined up a Rs 100 crore investment to expand production capacity at its Modipuram plant in Uttar Pradesh by 'double digits' and to roll out bigger tyres for utility vehicles, which now account for over 60 per cent of the overall annual domestic passenger vehicle segment in India.
In an interaction with PTI, Continental Tires India MD Samir Gupta said that with the earmarked capital, the company aims to enhance its overall capabilities to align its portfolio to reflect the evolving lifestyle needs of Indian drivers.
"Currently, we can produce up to 20-inch tyres at the plant, but with this new investment, we would be able to produce up to 23-inch tyres," he noted.
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"I guess the future lies in the UV-SUV segment...I believe the future lies there. We want to emphasise this entire investment in that direction," he added.
Gupta noted that the company's shift in the country towards the passenger vehicle segment reflects the changing needs of Indian consumers.
"Currently, consumers are using cars for commuting and long drives because of the infrastructure boost, without compromising on their safety and comfort, for sure, so, that will remain our focus in terms of our product," he stated.
Secondly, there is a strong growth in utility vehicles and luxury cars, which means the market is moving towards more premium vehicle segments, and that will remain the company's focus, Gupta added.
He said Continental is growing faster than the market. "Passenger vehicle tyre market is almost flat and may be growing at 2-3 per cent on an average. However, we are growing in double digits...and we would like to keep this momentum going forward."
On the company's exit from the truck and bus radial tyre business in India, Gupta said that after evaluating, the tyre maker figured out that it is a highly price-conscious business coupled with intense competition coming from domestic players, which makes it so difficult to realise the right price for the product.
"We had the best products in the industry, which are highly appreciated by our customers and the fleet owners. Our customers have given feedback that our products are performing up to 20 per cent better than the competition. However, when it comes to the willingness to pay in the commercial segment, it's not there," he added.
These are a few factors that actually enabled the decision to exit this business, Gupta said.
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