E-rickshaws: The Electric Advantage

E-rickshaws: The Electric Advantage

The introduction of electric-rickshaws (e-rickshaws) in some Indian cities has made a major positive impact on urban air pollution. However, most of the electric-rickshaws are fitted with two-wheeler scooter tyres, which are not ideal for them, says Manav Kapur, Executive Director of Steelbird International. The company has introduced tyres for electric-rickshaws

By Sharad Matade

Steelbird International, a major Indian manufacturer of rubber components and automotive filters, is aiming at catering to growing emphasise on electrification of three wheelers and demand for two-wheeler tyres to gain ‘considerable’ position in the Indian tyre market.

The Delhi-based company last year expanded its rubber product portfolio by introducing two-wheeler tyres and tyres for electric-rickshaws and tyre tubes during the Auto Expo held in Delhi. In an interview with Tyre Asia, Manav Kapur, executive director, Steelbird International says, “Steelbird International has been producing rubber components for more than 50 years and today we produce more than 1500 types of rubber components, supplying to OEMs and aftermarket globally. Being in rubber component industry, we were not only doing tyres and rubber tubes. We thought that tyre business will naturally integrate very well with our existing rubber components business.”

Founded in mid 60s, Steelbird International, has grown by a rate of 22.7 per cent annually (CAGR) in the Auto Component manufacturing sector of India, many OEM clients, including Greaves Cotton Limited, Tata Ficosa Automotive Systems Pvt. Ltd., Lumax Auto Technologies Limited, and Royal Enfield (A Unit of Eicher Motors).

According to a media report, India has around 1.5 million battery-powered, three-wheeled rickshaws. Predicting future of electric rickshaw, a research report prepared by P&S Intelligence, the Indian electric rickshaw market is projected to reach 935.5 thousand units by 2024. The research report adds that the market growth is majorly driven by government incentives and environmental policies, and electric rickshaw advantage over auto rickshaw and cycle rickshaw. “In order to address the issue of degrading air quality, the Indian government launched the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) scheme in 2015, in addition to implementing environmental regulations on conventional gasoline-based vehicles. In response, the OEMs are increasingly making investments to develop affordable and efficient electric rickshaws and established players of the automotive industry are making inroads in this market with the launch of new electric rickshaw models,” says the report.

“If you look at the Indian electric rickshaw market in India, most of the electric rickshaws are fitted with two wheeler scooter tyres which are not ideal for them (electric rickshaws),” said Kapur.

Different applications

Applications of electric rickshaws are different from two-wheeler scooters. Payloads are different as two-wheelers carry two people, whereas electric rickshaws can carry up to five people. The two-wheeler tyres move in manoeuverable radius, whereas the rickshaws go flat. Two-wheeler vehicles and electric rickshaws also have different speed. “We are manufacturing in tyres for electric rickshaws which have the same size of two-wheeler scooter tyres, but the pattern and designs are different as per the requirement of the electric rickshaws,” says Kapur.

He also maintains that Steelbird International does not see much competition in electric rickshaws tyre segment as its products are unique for electric rickshaws. The company is currently working on a couple electric rickshaw manufacturers to develop tyres for electric rickshaws in future.

Steelbird International also plans to develop tyres electric scooters in India. “We are working on making tyres for electric scooters. Electric scooters tyres also need different designs as these scooters have less vibration level and low speed,” says Kapur.

Though electric vehicle market is small, the government India is pushing FAME India programme through substantial financial incentives on electric and hybrid vehicles. “Though the market for electric vehicles size is very small, India is also focusing more on eco-friendly mobility which fuel the demands for our electric rickshaws,” adds Kapur. The government has cleared the much-awaited FAME II, allocating Rs10000 crore which is expected to give further boost to adaptation of EVs.

However, a challenge for Steelbird International is to cater to small and fragmented electric rickshaw companies. “We are able supply our tyres to electric rickshaw companies which are mostly startups with small scale of production by differentiating our self from others and serving unique products,” said Kapur. The company currently produces lower CC bikes and has six models, Revolve, Orbit, Infinity, Ranger, Ferro and Voyager, of two-wheeler tyres.

The company has set up own manufacturing plant near Hyderabad to produce tyres for electric rickshaws and two-wheeler tyres. It currently produces 10 to 12 sizes and six patterns of tyres. The plant is as of now running on small scale, but Steelbird International has deployed automations and industry 4.0 systems for efficient and quality production.

The two-wheeler tyre segment has outperformed other segments in the tyre industry in India in recent years. According to ICRA, against the tyre industry volume growth of ~8% (5-year CAGR of FY2013-18), the 2W tyre segment grew by a healthy 13.6%, the highest among all product segments. This higher was supported by robust scooter volumes and rising motorcycle sales on the back of good rural demand.
As of now, Steelbird International is focusing on aftermarket to expand its tyre business. “We do not have any plan as of now to supply for OEMs for next 5 years. Once we are established ourselves in the Indian after market, we will supply original equipment manufacturers,” says Kapur.

Two-wheeler tyres

Currently the domestic two-wheeler tyre demand is equally split between the OEM and the replacement segments. In recent years, there has been a shift in segment-skew in favour of the replacement segment (42% in FY2014 to 51% in FY2018). During FY2013-18, the replacement segment grew by 17.7% while OE segment grew by 8.0% (CAGR).
The two- wheeler tyre is probably the most competitive market on prices in India and is dominated by well-established players. However, Steelbird International has a big advantage of its brand image particular among two-wheeler riders and vast distribution network. “We are focusing on only those markets initially where we have strong presence for our rubber products. We are selling our tyres through our auto components distribution channel, not through tyre retailers like others,” says Kapur.
Today Steelbird International has more than 500 distribution network partners across India and neighboring countries. “Having over four to five decades of association with distribution channel people, we could easily introduce our tyre products in the market. We are also seeing a push from the distribution channel for our tyre products,” says Kapur.

The company has hired industry experts for manufacturing and marketing activities. “We have industry experts who are Pioneer in technologies for compounding, and they develop recipes. We have also set up a separate marketing team for our tyre business,” says Kapur. As of now the company relies on outside support for research and development. “Right now, we have limited search and development activities in house, and use third parties for designing and prototyping,” says Kapur.

The company is targeting tier I and tier II cities to expand its tyre business in India. The company is continuously increasing its market penetration and had already received a good response from entire north India, including UP, MP, Punjab, Haryana, and Delhi-NCR, and Assam. It has already started exporting to Nepal and is looking to supply tyres to Sri Lanka and Bangladesh. Steelbird International is also exploring possibilities for exporting tyres to Latin American markets. “We already supply our rubber components to Brazil and Guatemala and have our customers in these countries. Some of our customers have shown interest and a matter of fact that one of them has place an order for tyres as well,” says Kapur.

Right now, the company is looking for required certifications for tyres to be supplied in the Latin American markets. “Once we have certifications in place, we will start supplying tyres and tubes to these markets,” says Kapur.

The company has also introduced a new service which no other tyre manufacturers are offering in India and the new service helps the company enhance its brand. “Everybody offers warranty and guarantee their products but we, part from regular warranty and guarantees, have introduced a service called, puncture doctor. This is a unique service. In the first year of purchase of tyres, if a tyre gets flat anywhere, we offer service to fix it. The rider has to make a call to our service centre, and our service person will come and fix it,” Says Kapur.

Kapur has an ambitious plan for his tyre business. “We want to be knowns as a considerable player and in top three in next five years,” says Kapur.

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