Growing with the market
By Sharad Matade
Growing along with the growth of the market is what Yokohama India focuses on. Customer trust and brand performance are important elements in this vision, says Satoshi Fujitsu, President and Director, Yokohama India
Knowing the Indian tyre industry’s dynamic and future prospectus, Yokohama India, apart from expanding its business in India, is also focusing on branding and cost performance to win customers’ trust. “We want to grow along with Indian market growth, and earn trust and need from customers in terms of function, brand, and cost performance,” Satoshi Fujitsu, President & Director, Yokohama India, told Tyre Asia.
And to achieve its target, Fujitsu has a long to-do list.
According to Fujitsu, Yokohama India targets to offer good products with good prices in a timely manner and will create a new value with highest technology. Along with its commercial targets, Yokohama India will also focus on environment, people and society.
“We want to become a company that contributes to environment, respects and cultivates human values, and creates the field where people can play important roles. Yokohama India also respects fairness to the society and harmony with environment,” adds Fujitsu. In the process of contribution to environment, people and society, the company will expand business and keep looking new opportunities.
After commencing its passenger tyres manufacturing plant two years ago, the recent acquisition of off-the-road giant Alliance Tire Group (ATG) has given Yokohama India a strong entry in the commercial tyres segment in India. ATG produces tyres for agricultural, industrial, construction, forestry machinery which it sells in 120 countries with a focus on the North American and European markets. The Japanese tyre company bought ATG from US private equity giant KKR, for about $1.2 billion.
“Yokohama Rubber does not currently manufacture or sell tyres for agricultural or forestry machinery. The acquisition will strengthen Yokohama Rubber’s product line-up in commercial tyres,” the company had said in the statement. The demand for agricultural equipment tyres is expected to increase due to growing use of farm machinery.
Entering a market which has been traditionally dominated by a few companies is quite hard task for any company, albeit it is one of the leaders in the global market. This is what a similar story of any foreign tyre making company when they do business in India and Yokohama India is no exception.
Though Yokohama is a global brand, the company had to start from zero, from building on brands to produce own products locally to make them more competitive in India. The company, two years back, started its passenger car tyre manufacturing plant in the northern state of India, Haryana with a production capacity of 7 lakh units a year. The plant was started with manufacturing of its beands-Earth-1 tyres, designed to cater to the comfort and economy segment along with S. Drive.
According to a media report, now the plant is running on 80 per cent utilisation rate and producing 5.5 lakh tyres, while one lakh high-end SUV tyres are being imported. The company’s sales in India also rose 45 per cent in 2016 over the previous year and it sold over 4.2 lakh units last year, and expects to sell over 6.5 lakh units of tyres this year. In the long term, the tyre maker expects to invest around Rs 500 crore to take its total capacity to 3 million units a year by 2020, added the media report.
Yokohama India is also keen to enhance its present and be more cost competitive in the price sensitive customers in India. “We continuously act to improve our presence, cultivate new business channels and become cost competitive,” says Fujitsu. The company recently launched two new tyre patterns — Advan V105 and Geolander SUV — for the Indian market. The V105 pattern is to cater to the luxury segment of cars, while the Geolander will target a city SUV. The company announced the launch of four sizes in this line-up by expanding it to 13 within in 2016.
Expansion of distribution network is also on Yokohama India’s radar. The company currently has more than 825 point of sales which also includes 44 Yokohama Club Network (YCN) across India.
The company has presence in the country for around a decade, selling its tyres in the replacement market. However, with the opening of the plant, the company’s strategy of targeting replacement markets will continue in future, but will also focus on OEMs in future. Yokohama currently has around two to three percent market share in the replacement market, and is yet to open its account in the OEM space. The company is already in talks with Japanese carmakers like Toyota, Honda and others to get the OEM business.
In India, the company faces challenges on prices and from new emerging players in the country. “In view of the changes happening in the tyre industry, we are facing challenges from emerging makers of developing countries and price competitiveness. Mounting pressure from customers from both, OE and replacement segments, and anticipated stringent legislations are leading tyre companies to make technological advanced products that too at competitive prices. “The Indian tyre industry will be more competitive industry for developing new technology and cost etc,” adds the Yokohama India MD.
The company is already implementing green manufacturing process in India. “In the manufacturing process, we minimize scrap against purchased materials while adding the values to them. If there is scrap, it is re-used or will be converted to other products such as fuel or other rubber products. Based on 3R (Reduce, Reuse, Recycle), we aim zero-emission,” tells Fujitsu. “As nature of the manufacturing plant, we emitter CO2, however this February, we launched Forever Forest activity to plant trees and create forest within the property to absorb CO2,” adds Fujitsu.