SCDL MBA PROJECT - A Study of Marketing strategies of (METRO TYRES Ltd.)

SCDL MBA PROJECT -   A Study of Marketing strategies of  (METRO TYRES Ltd.)SCDL MBA PROJECT -   A Study of Marketing strategies of  (METRO TYRES Ltd.)

INTRODUCTION

               

                                       Manufacturer & Exporters of
                          Bicycle Tyres, Tubes and Chains

From humble beggining in 1968, Metro Tyres made steady progress to establish itself as a market leader for bicycle tyres and tubes in India.With steadily increasing production of quality products, the Company ventured into overseas market and developed a niche for itself in the international market. The Company also kept itself abreast with latest technologies and developed Nylon tyres and Butyl tubes with its own R&D efforts.
The Company has diversified into the field of home appliances such as  electric fans, electric irons, sewing machines, etc. under the brand name "ORTEM" . 
The customer being foremost in our mind, for ease of foreign buyers, the Company has established a full fledged "Export Division" located at New Delhi. The Export Division has the capability for entertaining and servicing enquiries not only for the Company products, but also for non-company commodities and engineering goods.
Metro's most precious assets is its professionally trained and dedicated personnel.

                                                                              

                                                                                                                  

                                                                                                                                                                                                                                      

                                    

                    

                

                                                        

                                                         Tyre

                                      Tube

                                      Chains

                                               

                  

                                                       Motor cycle

                                     Scooter

                                     Three wheeler

                                     Hand cart

                                     Jeep

         

      

              

            

                

                          

                                

                                                             

        

            

            

            

              

READY RECKONER SIZE RIM TYPE TREADS AVAILABLE CONSTRUCTION OPTIONS LOADABILITY COTTON NYLON PER 20' FCL 28x1.75 - M-170 YES 8,500  28x1.1/2 HB/SS M-100 M-650 YES YES 11,000  28x1.5/8x1.3/8 SS M-200 YES 11,000  28x1.5/8x1.1/4 SS M-200 M-225 YES 11,000  28x1.5/8x1.1/8 SS M-200 M-225 YES 11,000  28x1.5/8x1  - M-750 YES 11,000  27x1.1/4 SS M-105 YES 11,000  26x1.3/8 SS M-100 YES 11,000  26x1.1/2 SS M-100 YES 11,000  26x1.1/2x1.5/8 SS M-160 M-170 YES 11,000  26x1.1/2x2 SS M-190 M-250 M-400 YES 8,500 26x2x1.3/4 SS M-190 M-700 YES 8,500  26x2.125 HB M-120 M-400 YES YES 8,500  26x2.10 / 26x2 - M-120 M-400 YES 8,500  26x1.95 HB M-120 M-400 M-500 M-550 M-650 YES YES 8,500  26x1.95 HB M-1000 YES 8,500  26x1.90 HB M-550 M-600 M-650 YES YES 8,500  26x1.75 HB M-150 YES YES 9,000  24x1.1/2 SS M-100 YES 11,000  24x1.3/8 - M-100 YES 11,000  24x2.125 HB M-400 YES 8,500  24x1.90 HB M-650 YES YES 9,000  24x1.75 - M-550 YES YES 11,000  20x2.125 HB M-110 M-300 M-400 M-650 YES YES 11,000  20x2x1.3/4 - M-400 YES 11,000  20x1.90 HB M-550 M-650 YES YES 11,000  20x1.75 HB M-160 M-300 M-400 YES YES 11,000  20x1.3/8 - M-100 YES 11,000  18x1.75 HB M-300 YES 11,000  16x2.125 HB M-300 M-400 YES YES 11,000  16x1.90 - M-550 YES YES 11,000  16x1.75 HB M-160 M-300 M-400 YES YES 11,000  14x1.75 HB M-300 YES 11,000  14x1.3/8x1.5/8 - M-550 YES 11,000  12.1/2x2.1/4 HB M-170 M-300 YES 11,000  Standard Packing: 50 tyres / sets of tyres & tubes will be packed in a bundle wrapped with H.D.P.E. sheet.                                         Tread Patterns M-100 M-105 M-110 M-120 M-130 M-150 M-160 M-170 M-190 M-200 M-225 M-250 M-300 M-350 M-400 M-450 M-500 M-550 M-600 M-650

TUBES ARE MOULDED FROM EITHER OF THE FOLLOWING MATERIALS:
NATURAL RUBBER			BUTYL RUBBER
PACKING OPTIONS				LOADABILITY PER  20' FCL
Each tube in polybag; 100 pcs in master bag.				60,000 pcs
Each tube in polybag; 100 pcs in master carton.				50,000 pcs
Each tube in Metro box; 100 pcs in master carton.				45,000 pcs
(2nd & 3rd methods entail extra charges)

The valve types available BICYCLE TUBE DUNLOP VALVE
BICYCLE TUBE AMERICAN VALVE

	Chain sizes: 1/2x1/8 1/2x3/32 standard 1/2x3/32 chamfered (index) Chains can be supplied in any number of links or in rolls of 150 meters.   Packing  Each chain in a Metro box, 50 pcs in a master carton.  150 meters wound on a metal spool packed in a strong wooden case.

 

Sleek 2.75-18 6PR	Jet Speed 3.00-19 6PR	Jet Speed 3.25-16 6PR

Steel Force 3.50-8 4PR	Steel Force 3.50-10 4PR

Power 16*4 8PR

Jeep 6.00-16 8PR

Kisan 7.00-19 10PR	Heavy Duty 7.00-19 10PR	ADV 7.00-19 10PR
Metro Heavy Duty ADV 5.00-19	Metro Heavy Duty ADV 8.00-19	Metro Heavy Duty ADV 6.00-19
Metro Heavy Duty ADV 6.00-20

Field king 6.00-16 10PR	Yield king 6.00-16 10PR	Shaktiman 6.00-16 10PR
High Yield 6.00-16 8PR	T-90 6.00-16 8PR	Farmer 6.00-16 10PR
Jai Kisan 6.00-16 10PR	Shaktiman 5.50-16 10PR	Field King Extra Heavy Duty 6.00-16

Power Trailor 6.00-12 6PR

TR 13.6.28	TR 12.4.28

                                    SWOT ANALYSIS

                                                                SWOT ANALYSIS

Strengths

1.      Wide product offering at different interest rates.

2.      Large distribution network

Weakness      

1.      Lack of advertisement activites,

2.      Focus only on middle class.

3.      Limited products

Opportunity

1.      Rise of Indian middle class and small cities.

2.      A booming economy

Threats

1.      Many players fighting for the same cake

2.      Entry of new players

METRO TYRES LIMITED

Metro House, 134/4, 135/5 Zamrudpur, Kailash Colony,  New Delhi -110 048  Phone : 91-11-6219097/98   Fax No.: 00-91-11-6215113

Email for exports : exports@metrogroupindia.com

Email for other enquiries : metro2@vsnl.com

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Please contact the above office for :

Further information on Auto Division ::-   Export enquiries for cycle tyres to USA, EUROPE, CANADA, AUSTRALIA, JAPAN ::- All domestic enquiries ::- All raw material supplies ::-

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Works ::-

METRO TYRES LIMITED, FACTORY & HEAD OFFICE

B-27 Focal Point, Ludhiana - 141 010 (INDIA)  Phone: 91-161-2671111 - 18,   Fax: 91-161-2671119  Email :navneet@metrotyres.com

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For export enquiries for cycle tyres except USA, EUROPE, CANADA, AUSTRALIA, JAPAN ::-

METRO TYRES LIMITED, EXPORT DIVISION

602 Siddhartha Building, 96 Nehru Place, New Delhi - 110 019 (INDIA)   Phone: 91-11-26447353, 26463522, 26234478   Fax: 91-11-26447381   Email:exports@metrotyres.com

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           TYRE                                                                         

                INDUSTRIES

The report elucidates facts about the Indian Tyre Industry, supplemented by latest statistical data and comprehensive analysis.
Emphasis is laid on the following key subject matters to accomplish the report

• The characteristics of the industry (raw material intensity, cyclicality, competition, wide distribution network, capital intensity, low bargaining power, branding, technology requirements, margins and duty structure) and its demand drivers (vehicle production & population, regulatory norms, retreading of tyres etc.).
• Category-wise tyre production and market-wise tyre offtake analysis for the period FY 03-07.
• Market competition and category-wise market share of players. Change in category-wise market share of players in FY07 vis-a vie FY06.
• Cost Analysis (raw material, power & fuel, employee and selling expense) of the top players with specific focus on raw material costs.
• Category-wise tonnage offtake growth projection for the tyre industry for a fi ve year horizon (FY 07-12) along with SWOT analysis of the industry.
• Financial profi le, international forays, expansion plans of the top fi ve players along with the details of corporate actions by other global and local players in India.

The Indian Tyre Industry produced 736 lakh units of tyres (11 lakh tonnes) garnering Rs. 19,000 crores in FY 07. MRF Ltd. was the market leader (22% market share) followed closely by Apollo Tyres Ltd. (21%). The other major players were JK Tyre & Industries Ltd (18%) and Ceat Ltd. (13%). The industry tonnage production registered a 5 year CAGR of 9.69% between FY 02-07¬.
Truck & Bus tyre category (accounting for 57% of the tonnage production) recorded a 5 year CAGR of 7.85% (a rate slower than that of the industry) while Light Commercial Vehicle (LCV), Motorcycle and Car tyre categories grew at 15%, 16% and 14% respectively (at rates faster than that of the industry). Off the road (OTR) tyres (customized tyres which fetch a higher margin compared to other tyres) category is growing at a fast pace. The OTR tyre category registered a 5 year CAGR of over 20% in the last five years. Most of the top players are increasing their capacity for the production of OTR tyres so as to improve their product mix, for e.g. CEAT Ltd. is increasing its OTR capacity at its Nasik plant from 60,000 to 1,00,000 tyres by end 2008, JK Tyre & Industries is expanding its OTR capacity from 25,000 tyres to 42,000 tyres by end 2008, even smaller player like Falcon tyres is making its foray into the OTR category.
The exports from the country clocked a CAGR of 13% in unit terms and 18% in value terms in the period FY 02¬07. Most of these tyres that are exported are of cross ply design. With radialisation catching up in some of these markets, the manufacturers will need to graduate to radial tyres so as to protect their share in the export market. Radialisation of tyres is still minimal in India. Only the car tyre market has moved to radial tyres (95%) but in all other categories cross ply tyres are still preferred. Poor road conditions, overloading in trucks, higher initial cost of radial tyres and poor awareness levels in tyre users are the main reasons for the non transition of the domestic market to radial tyres. However, going ahead, radialisation in truck & bus tyres may increase due to government’s focus on infrastructure development.
CARE Research expects the tyre industry to register a tonnage growth of 9¬10% in the next five years (FY 07¬12). The truck & bus and LCV tyre category are expected to register a CAGR of 8% and 14% respectively (FY 07¬12).  

Background The origin of the Indian Tyre Industry dates back to 1926 when Dunlop Rubber Limited set up the first tyre company in West Bengal. MRF followed suit in 1946. Since then, the Indian tyre industry has grown rapidly. Transportation industry and tyre industry go hand in hand as the two are interdependent. Transportation industry has experienced 10% growth rate year after year with an absolute level of 870 billion ton freight. With an extensive road network of 3.2 million km, road accounts for over 85% of all freight movement in India. Market Characteristics Demand The demand for tyres can be classified in terms of:

▪  Type: Bus and Truck; Scooter; Motorcycle; Passenger Car; Tractor ▪ Market: OEM; Replacement; Export Environment Analysis - Porter's Model Entry Barriers: High The entry barriers are high for the tyre industry. It is a highly capital intensive industry. A plant with an annual capacity of 1.5 million cross-ply tyres costs between Rs. 4,000 and Rs. 5,000 million. A similiar plant producing radial tyres costs Rs. 8,000 million. Bargaining Power of the Buyers: High The OEMs have total control over prices. In fact, the OEMs faced with declining profitability have also reduced the number of component suppliers to make the supply chain more efficient. Bargaining Power of the Suppliers: High The tyre industry consumes nearly 50% of the natural rubber produced in the country. The price of natural rubber is controlled by Rubber Control Board and the domestic prices of natural rubber have registered a significant increase in recent times. Inter Firm Rivalry: Low The tyre industry in India is fairly concentrated, with the top eight companies accounting for more than 80% of the total production of tyres. Threat of Substitutes: Low but Increasing During the FY2002, over 1,10,000 passenger car tyres were imported. This constitutes over 2% of total radial passenger car tyre production in the country. However, with the reduction of peak custom duty, the import of tyres is likely to increase. Tyres by Type The Indian tyre industry produces the complete range of tyres required by the Indian automotive industry, except for aero tyres and some specialised tyres. Domestic manufacturers produce tyres for trucks, buses, passenger cars, jeeps, light trucks, tractors (front, rear and trailer), animal drawn vehicles, scooters, motorcycles, mopeds, bicycles and off-the-road vehicles and special defence vehicles. The scenario in India stands in sharp contrast to that in the world tyre market, where car tyres (including light trucks) have the major share (88%) by volume followed by truck tyres (12%). In India, however, passenger car tyres have a mere 17% share of the overall tyre market (as of FY2003).  Compiled by INGRES Truck and Bus Tyres The truck and bus tyre segment accounted for 19% of tyres produced in India in FY2003. Every truck/bus manufactured generates a demand for seven tyres (six regular and one spare) as against three in the case of two-wheelers and five for passenger cars. In addition, the price of a truck tyre is significantly higher than that of a passenger car tyre (roughly 10 times) or a motorcycle tyre. Thus the demand multiple emanating from the commercial vehicle segment is highest in value terms. Given the regular use and heavy wear and tear of truck and bus tyres, the demand from the replacement market in this segment worked out to 68% of the total demand for truck and bus tyres in FY2003; the OEM demand accounted for around 9% the same year. With the Indian manufacturers of cross-ply tyres focusing on the export market, this segment accounts for around 22% of the demand for truck and bus tyres. Passenger Car Tyres The passenger car tyre segment accounted for 17% of all tyres produced in India in FY2003. With passenger car production witnessing a growth of 12% in FY2003 over the previous year, OEM demand accounted for about 33% of the total sales that year. The replacement market accounted for around 63% of the total sales of passenger car tyres in FY2003. Exports accounted for 4% of the total passenger car tyre demand in FY2003. With the stock of cars increasing, replacement demand is likely to continue. Motorcycle Tyres Motorcycles accounted for 76% of two-wheelers sold in the domestic market in FY2003. Motorcycle tyres constitute the largest segment of the domestic tyre industry (29% of total tyre demand in FY2003). The replacement market accounted for around 49.8% of the total motorcycle tyres sold in FY 2003, while OEM demand accounted for around 50%. Scooter Tyres Scooters were the dominant segment in the Indian two-wheeler industry till FY1998, accounting for around 42% of domestic two-wheeler sales. However, the introduction of new motorcycle models has seen the share of scooters declining to 19% of domestic two-wheeler sales in FY2003. The OEM segment accounted for around 34% of the total sales in the scooter tyre segment in FY2003, with the rest being accounted for by the replacement market. Tyre Demand by Markets Vehicle Manufacturers or OEMs The demand from the OEM segment is a derived one and directly correlated to the level of automotive production. The OEMs demand varies significantly across categories from between 8% for truck and bus tyres to over 50% for some other segments like, jeeps and mopeds. Replacement Market The replacement market, including State transport undertakings and Government buying, accounted for around 59% of the total tyre demand in FY2003. The demand in the replacement market depends on the vehicle population, the level of economic activity, life of the products transported, kilometreage per vehicle, the price of the tyres and the quality of the existing road infrastructure. Additionally, the replacement market, which offers better margins, is extremely competitive. The replacement market is dominated by the truck and buses segment, which accounted for 22% of all tyre sales in the replacement market in FY2003.The large size of the replacement in turn is determined by the interplay of various factors as discussed below:  ▪  The replacement demand may be lower because of longer replacement intervals and lower business mileage if the economic activity slows down.  ▪  Replacement demand in India is higher because of a low vehicle scrappage rate. ▪ Poor road conditions by lowering the life of tyres, have a positive impact on replacement demand.  ▪  Stricter enforcement of the MV Act, which seeks to prevent overloading of vehicles, will result in an increase in the life of tyres and thus impact replacement demand negatively. ▪ Applying a new tread or "re-treading" can extend the life of the tyre at a significantly lower cost, thereby lowering replacement demand. In India, re-treading finds greater acceptance in the commercial segment.  ▪  Radialisation of tyres is likely to result in lower replacement demand. While car radialisation in the country has reached a level of 65%, truck and bus radialisation stands at just 2-10%. Poor road and support infrastructure as well as traditional vehicle designs act as a barrier to radialisation in the commercial vehicle segment. Radial technology for trucks and buses would help increase operating efficiencies by delivering better mileage and minimising wear and tear. According to ATMA, even if only 25% of the truck and bus segment is radialised, the savings in fuel costs would be around Rs. 7,500 million. ▪ Introduction of tubeless tyres in the passenger car segment is also likely to affect replacement demand adversely. ▪ Introduction of eco-friendly radial tyres such as hyper-bonding silica technology in the passenger car segment may affect replacement demand adversely. Exports In the light of the prevailing domestic market situation, most of the tyre manufacturers have taken to exports to reduce inventory build-ups. In FY2003, Indian tyre exports stood at Rs. 10.8 billion (10% of the total industry) in value terms and 3.1 million in unit terms (6.5% of total production). Indian companies have currently entered into sourcing agreements (for tyres) with neighbouring countries. For instance, Ceat and J K Tyres have sourcing agreements with tyre producers in Sri Lanka and China. This is likely to have a positive impact on tyre exports from India. Market Players Some of the major players in the Indian tyre industry are MRF, Ceat, JK Industries, Apollo Tyres, Bridgestone India, Goodyear India, Falcon Tyres and TVS Srichakra. The tyre industry in India is fairly concentrated, with the sample of eight companies (as in the text) accounting for 82% of production in FY2002. Besides, not all companies have a diversified product portfolio. Key Issues High tax usage The high tax content on tyres can be gauged from the fact that the percentage of total tax to the tax excluded price for various categories of tyres is - 44% for Truck Tyre; 41% for Passenger Car Radial Tyre, 35% for Tractor Rear Tyre and 76% for Truck Tyre Tube. Increase in raw material costs Apart from being capital intensive, the tyre industry is highly raw material intensive. Any change in the prices of raw materials affects the profitability of tyre companies. The raw materials used in the manufacture of tyres are rubber and petroleum derivatives like nylon tyre cord, carbon black, styrene butadiene rubber and poly butadiene rubber. The most important raw material is rubber-natural and synthetic. Natural rubber (NR), with 29% weightage in the cost of raw materials used by tyre industry, is the highest cost item. Annual consumption of NR by tyre industry is 3.50 lakh tonnes, valued at Rs. 14 billion. Over 85% of NR consumed' by the industry is procured domestically. 15% is imported. In the 2003-04 fiscal, as against the Minimum Statutory Price of Rs. 32.0 per kg, the ruling domestic price of NR had been over Rs. 50 per kg. This is higher than the world rubber prices. However, this does not entail the tyre industry players to import as a number of restrictions are imposed on the import of NR. NR can be imported only through two ports-Kolkata & Visakhapatnam. The customs duty on import of natural rubber is 20%, with 10% under Bangkok Agreement. However, this is not relevant, as NR is not cultivated in South Korea, Bangladesh & China (signatories under the Bangkok Agreement). Hence, NR can be sourced only from Sri Lanka (under the Indo-Sri Lanka Agreement), which is of bad quality. Thus, the options of rubber import are restricted and the manufacturers have to rely on the domestic market for procuring rubber. Import of tyres During the FY2002, over 1,10,000 passenger car tyres were imported. Although this constitutes a small percentage (1.5%) of total passenger car tyre production in the country, since total imports are of radial passenger car tyres, the percentage is higher when compared against domestic production of radial passenger car tyres. A large percentage of imports are from South Korea at a concessional rate of customs duty (i.e. 15%) under the Bangkok Agreement - as against 20% normal rate of customs duty. Even though the Government has imposed a restraint on the import of used tyres into India, occasionally there are reports of import of such tyres in a clandestine manner, sometimes as new tyre at low value, since there is no restriction on import of new tyres or as tyres under the "others" category. Many countries such as Japan, Bangladesh, Pakistan, Philippines, Thailand, Kenya, South Korea, etc. have either put a complete ban on import of used tyres or have placed stringent conditions on such imports. Tyre Exports The product focus of tyre exports from India has been Traditional Truck Tyres. Globally this segment of tyre export is shrinking due to greater acceptance of radial tyres. Over the years, China has emerged as a major exporter in bias tyre category. Additionally, export of Indian tyres to select countries is subjected to non-tariff barriers (NTBs) by way of standards, tests, etc. Export of cheaper tyres from China to major tyre importing markets, like US, is adversely affecting Indian tyre exports to these markets. India's share in exports to these countries (especially USA) is progressively declining. If the trend is not reversed, Indian tyre industry will find it extremely difficult to regain its erstwhile position in these markets. Low rate of interest, cheaper electricity tariff, hidden subsidies by the Chinese Government, better infrastructure facilities and lower transaction costs are factors favourable to Chinese tyre industry. Trends in Production, Consumption, Price & Capacity Utilisation The total tyre produced in the country was 51.58 million units in FY2003 - a 19% growth rate over FY2002. CAGR of tyre production (in %) FY 1993-2003 9% FY 1993-1998 7% FY 1999-2003 9% FY 2002-2003 19% Compiled by INGRES   Currently, the size of the Indian tyre industry is estimated at Rs. 128 billion (0.5% of Indian GDP), as of FY2003. The total installed capacity of the Indian tyre industry is around 60.5 mn units, and the capacity utilisation is around 85%. The capacity utilisation improved in FY2003 following improved demand from the automotive segment (75% in FY2001). Additionally, in FY2003, the price realisation of tyre manufacturers also registered an increase by 8%, as against a 0.6% increase in FY2002. Demand Supply Gap The demand for tyres is either in the domestic market or in the export market. As far as domestic demand is concerned, the OEM and the replacement segments are likely to witness strong growth given the current performance of the automotive sector. Given the strong linkages of tyre industry with automotives, its demand is likely to be strong over the short to medium term. As for the export demand for tyres, the outlook is positive, even though some downsides remain. As regards supply of tyres, currently, the major players are in the process of expanding their capacities, in anticipation of uptrend in sales. For instance, Apollo Tyres has set up a joint venture with Michelin for manufacture and sale of bus and truck radials. JK is expanding its Mysore truck and bus radial facility along with eyeing acquisitions of smaller units. Ceat has increased its offtake by 3 times from Pirelli. However, a characteristic of the Indian tyre industry is that most of the tyre manufacturers in the past had increased capacities in anticipation of a surge in demand, but when it did not materialise, they reduced their addition to capacities. Thus, the demand-supply gap is likely to be an important issue for the Indian tyre industry over the short to medium term. Review of Performance Overall Performance The operating margin of the representative sample of tyre companies improved during FY2003. However, the net profit margin of the tyre companies even though improved, was still at 3%. Performance in FY2004 The tyre industry continues to be driven by good demand growth, propelled by sustained uptrend in demand and sales of automobiles in general, and commercial vehicles and passenger cars in particular. However, this does not get translated into improved margins for the industry, as it is witnessing sustained rise in prices of raw materials like natural rubber. Additionally, the customs duty on imports has been brought down from 25% to 20% and Special Additional Duty of 4% has been dispensed with. Outlook 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 in India, the industry remains inherently vulnerable to economic cycles. While radialisation has become the norm in the passenger car segment, in the bus and truck tyre segment, its acceptance is still limited. Bus and truck radialisation 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. The prospects of tyre exports from India appear healthy, following efforts by Indian companies to increasingly enter into outsourcing agreements with tyre producers in Southeast Asia, Eastern Europe and Latin America. Overall, tyre manufacturers are likely to tap the export market in an effort to boost sales. The increasing exports of bus and truck tyres (crossply variety) from India to developing countries is because of the fact that developing countries are unable to source them from developed countries as these are no more produced there. Tyre imports are unlikely to pose a threat to the domestic industry, given that domestic prices are lower than international tyre prices. In the domestic market, tyre manufacturers are expected to increasingly focus on expanding their dealership networks & explore possibilities of tie-ups among themselves to penetrate the growing customer base. They are also likely to pursue innovative measures (such as "dial-a-tyre service and road shows) to improve customer awareness. The consolidation of the Indian tyre industry is likely to continue in the coming years through mergers among existing players. The industry is likely to expand through a combination of organic and inorganic growth. While organic growth would come from raising efficiency levels, inorganic growth would be achieved through alliances and M&As.