The excerpts:
Q: After two consecutive years of record-high sales performance, what is your outlook for 2024?
The tyre industry has seen significant growth in the past couple of years owing to good economic conditions and supportive government policies. At JK Tyre, we have registered growth every quarter as we address the growing demands in the TBR and PCR segments in both the OEM’s and replacement market. Since we operate in a derived demand industry, we will follow the automotive industry’s demand path in addition to the customer’s consumption component.
In 2024, we anticipate experiencing further growth, propelled by robust domestic demand and strong expansion in the manufacturing and services sectors. Additionally, newer and stronger reforms, along with consistency in the existing economic policies, will further bolster the momentum. That being said, we anticipate further clarity regarding new policies after the general elections in April.
Q: What are the key micro and macro factors that will play an important role in shaping up 2024?
The year 2024 will be a significant year for India, particularly in terms of advancing the efforts to become a USD 5 trillion economy. Various elements will shape the nation’s future, but the general elections, which will determine government stability, are going to be very important. Furthermore, the Union Budget following the elections will play a pivotal role in defining the people’s purchasing power ultimately impacting domestic growth. Experts have predicted that government spending, particularly in the light of the general elections, would drive the first half of the year, with the private sector driving the second half due to the resurgence of investments.
Globally, the course of the on-going geo-political conflicts will influence commodity prices, which in turn will impact the industry’s growth.
Q: What is your view on electric vehicles in 2024?
In 2023, the EV segment passed a significant sales milestone of 1.5 million units, representing a 50% year-over-year increase. We further expect it to grow as a result of the quick uptake of EVs and the rapid advancement of the charging infrastructure and addressing range anxiety. Significant changes in the industry are also anticipated due to the changing environment, economic situation, and technical improvements in new products. We expect the EV passenger vehicles to reach up to 15% on the overall sales in the next 3 years.
In our opinion, keeping the subsidies in place is crucial to promoting EV adoption in India and enabling the nation to achieve its 2030 target. Furthermore, it also opens up more opportunities for the development of related industries. We at JK Tyre already provide a comprehensive range of EV tyres for every segment, and anticipating an increasing demand for EVs, we will continue to invest and are working towards enhanced products from future standpoint. Our tyres are trusted by major E-bus manufacturers.
Q: What will be the key technologies that will shape the next decade of the mobility industry?
Over the years, JK Tyre has been at the forefront of technological advancements, introducing innovative products including Xtra-Fuel Efficient Tyres, Puncture Guard Tyres, Smart Tyres, among others. Understanding our customer requirement, we made an investment in a smart tyre technology firm in 2019 with the goal of revolutionising the Indian tyre market and became the first tyre brand in the nation to introduce the Tyre Pressure Monitoring System (TPMS), which is based on sensor technology. We have consistently made efforts to match our product strategy with consumer and market expectations, and we closely monitor the market to anticipate emerging trends in the automotive industry. The global automotive industry is going through a paradigm shift due to the rapid development of technology. With every new product launched, automotive companies endeavour to keep up with the rapid changes in the industry with the introduction of new technologies. As consumers become more environmentally conscious and OEMs begin to address it, sustainability will also play a significant role in the future, along with technology.
At JK Tyre, our commitment to sustainability is evident in our latest creation, the ‘UX Green’ tyre, made with 80% sustainable materials. Developed by our skilled R&D team at our Raghupati Singhania Center of Excellence in Mysore, this tyre embodies our dedication to eco-conscious engineering. The ‘UX Green’ tyre utilizes a range of sustainable materials, including natural rubber, bio-based oils, and recycled rubber powder.
Alternative fuel technology and the adoption of EVs will also play a major role in shaping the future of the industry. India is a major proponent of ethanol blend fuel, and in the near future, the government is also considering hydrogen fuel cell technology. Furthermore, research on the mass production of sodium-ion batteries is underway as EV businesses explore alternatives to lithium-ion cells for batteries, providing a much safer and more cost-effective solution to their customers.
Moreover, Gen Z and younger generations prefer experiences over ownership, requiring enhanced technology in vehicles. Advancements in connected vehicles by inculcating an Augmented Reality (AR) interface will further enhance the driving experience. Additionally, comfort and convenience will be prioritised, increasing the need for mobility as a service (MaaS).
Q: Do you think the auto industry has the potential to become the global manufacturing hub and play an important role in the global value chain?
We believe that, to some extent, OEMs are already choosing India as their preferred location for manufacturing hubs serving international markets. India produced 4.11 million passenger cars for foreign markets in CY2023; according to industry sources, this number is anticipated to rise in the upcoming years. Cars developed and sold in India require little modification for export markets since national regulations have converged towards international ones.
Additionally, India provides automakers with a competitive cost advantage because of its low-cost manufacturing, labour cost negotiation, qualified manpower availability, and well-developed supplier network. Furthermore, India presents a profitable proposition and has significant potential to become a global manufacturing hub as companies embrace the China+1 policy. Most importantly, the Make-in-India initiative will motivate more firms to produce goods for both domestic and export markets.
With our manufacturing base in Rajasthan, Madhya Pradesh, Karnataka and Tamil Nadu, we are already exporting our products to 105 countries including those in Europe, North America, and Latin America. With our marketing arm in the United States, we have strategically established our presence in the global market as well. We are further looking at strengthening our presence in America and the Middle-Eastern markets.
Furthermore, as one of the major sites for global R&D and technology, India aids in the development of processes that support meeting demands across the globe. At JK Tyre, technology-enabled manufacturing has helped us boost productivity and efficiency.
Q: What are the key factors that work in favour of India, and what limitations do we have as a country?
Given the rapid GDP growth occurring worldwide, India presents a highly attractive investment opportunity since it leads the global economy at the moment. With its fast-expanding economy and friendly policies, India presents a huge opportunity for businesses looking to expand their global operations. From an infrastructure standpoint, the growth and increased emphasis on development make it even more profitable in the long run. Furthermore, India offers a sizable pool of talent with a range of skills and a semi-skilled workforce, as we have the largest youth population globally.
We think that the country’s ease of doing business will increase with the simplification of certain regulatory procedures and the full digitization of other processes.
Q: What is your vision for 2030 for the automotive industry?
By 2030, India’s automotive sector could be amongst the most advanced in the world due to the significant changes it is undergoing now. The government will continue to place a high priority on it, as it is a cornerstone of the country’s economy and accounts for around 7% of the nation’s GDP. We therefore expect that newer policies that are conducive to industry growth will be enacted in the near future.
Customers’ growing awareness of contemporary technologies and their self-motivated dedication to using sustainable products will shape the automotive industry’s future. Future predictions indicate that smart technologies and features like improved driver assistance systems, cloud-based data analytics, autonomous driving, etc. will become more prevalent. Additionally, the adoption of biofuels, electric vehicles, and hydrogen will be common; the transition towards these sources has already begun.
As per analysts’ reports, India’s engineering research and development (ER&D) and automotive software strengths could flourish by providing solutions that are in line with new trends. Being a nation with a robust and well-funded start-up ecosystem, we have the capacity to lead the automotive innovation space.
I firmly believe that, in contrast to previous years, the current decade will bring about significant changes for both the domestic and global automotive industries.
