Metro eyes higher 2-wheeler tyre sales

Metro Tyres is targeting a sales turnover of Rs 60 crore from two-wheeler tyres by March 2005. It is also eyeing a 10 per cent market share in the segment.

The Rs 256-crore company has already launched its Metro Continental brand of two-wheeler tyres in northern India and unveiled it in Gujarat on Tuesday. This is the first state to be tapped in the western region.

Metro Tyres, which has tied-up with German tyre major Continental AG early this year, will produce 100,000 two-wheeler tyres per month from its new plant in Ludhiana. As per the offtake agreement signed between the two companies, 30,000 tyres will be exported to Continental for sale under the latter's own brand name.

"We have launched two variants of Metro-Continental motorcycle tyres in the northern states in November as a first-phase market development exercise," Rummy Chhabra, group managing director of Metro Tyres, said at the launch of the tyres in Ahmedabad on Tuesday.

"We plan to have a network of over 1000 dealers across India in the next four months. The tyres will be launched in eastern and southern India early next year."

"We are targeting a sales turnover of at least Rs 60 crore from two-wheeler tyre sales by the end of March, 2005. We will also eye a 10 per cent share of the Rs 1200-crore two-wheeler tyre market," Chhabra added.

Metro Tyres hopes to sell 50,000 tyres in Gujarat in the first year. It expects sales to grow by 300 per cent in the next three years as the two-wheeler market. Metro, which has appointed 200 new dealers in the northern India so far, has named 150 dealers in Gujarat along with five distributors.

Metro may also go in for a capacity expansion at its Ludhiana plant in 2004-05. It is talks with major motorcycle and scooter manufacturers in the country for OEM (original equipment manufacturer) deals.

"We are in talks with all two-wheeler manufacturing companies and, following the initial talks, we can only say that the companies have shown tremendous interest for OEM deals. We are targeting sales of 20,000 tyres per month from the OEM contracts. However, as these deals take six-eight months to fructify (due to rigorous testing of the tyres by the two-wheeler manufacturers), we hope to get the benefits from the OEM business only during the second half of the next fiscal year," said Anup Malik, senior vice-president (marketing) of Metro Tyres.

It has been learnt that Metro is in an advanced stage of talks with Bajaj, TVS and Kinetic for OEM deals. Talks have also been initiated with Hero Honda.