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Taiwanese tyre major Maxxis Group is betting big on India, where it plans to build up to five factories, as it expects the country to play a crucial role in its chase to become a top five global player by 2025, according to a senior company official.
The company, which clocked revenue of around $4 billion in 2019, is currently the world's 9th largest tyre brand and sees India along with Indonesia to play significant part in meeting its 2025 target.
The company is investing $400 million on its first manufacturing plant at Sanand in Gujarat, where it is working to hike output to 60,000 units of two-wheeler tyres per day from the current 20,000 units a day, as part of the project's phase I expansion.
"Maxxis has a group goal of growing into the top five globally in next five years. We have accomplished much in East Asia, Southeast Asia and have significant presence in Europe and in American market.
"The next major international markets for us will be two places -- one is India and the another Indonesia, the major two-wheeler markets in the world," Maxxis India Marketing Head Bing-Lin Wu told PTI.
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He further said, "in achieving the group goal of 2025, India will play a pivotal role. We have estimated a certain output from the Indian market alone that will help us to achieve that target. On backward calculations four or five production units will be the minimum requirement to achieve that."
When asked about investments and timeline for setting up these plants, he said, "we will start a discussion very soon."
Also, he said the investments on the new plants would be comparably lesser than on its first plant at Sanand where the company has already made "some heavy advanced investments" on machinery for processes such as mixing, vulcanising and calendering and the "capacity of one machine is so huge that it can supply to six to seven production lines".
"In the subsequent plants, we will try to make an optimisation between our investments and utilising the current capacity of our Sanand plant," Wu said.
At present, Maxxis India supplies two-wheeler tyres to Honda, Hero MotoCorp, Yamaha and Suzuki from its Sanand plant, while it supplies four-wheeler tyres to Mahindra & Mahindra, Tata Motors, Maruti Suzuki and Jeep.
Commenting on Sanand plant expansion, Lu said, "we have used half of the land (106 acres) we got from the Gujarat government for the planned 60,000 units capacity. The other half of the land, we are still deciding whether to put another 60,000 units capacity of two-wheeler or we are going to put four-wheeler tyre production."
Maxxis has set a target of garnering 15 per cent of two-wheeler tyre market in India by 2023.
Lu said the company expects the Indian market to grow to around 10 crore units of two-wheeler tyres per year and if the company achieves its target of 15 per cent market share "we will more or less utilise the entire capacity of our Gujarat plant and anything beyond will require expansion of production in India".
On four-wheeler tyre segment, he said the group's 2025 target and expectations from India are pinned on both two and four-wheeler tyres segment "but volume-wise, definitely two-wheeler tyres in India has more advantage than four-wheeler tyre business".
When asked about growth prospects for 2020, Lu said Maxxis expects to continue with its growth momentum from last year, despite the automobile industry suffering a downturn as it was able to enhance its original equipment manufacturer (OEM) business share.
"I will say we are still in a position to aim at high growth given that we're going to have even higher share in the existing partnership and we are looking at multiple projects simultaneously with OE (original equipment) partners," he said.
