Tarang Srivastava, general manager of CEAT Specialty Tires Inc., tells Tire Business about CEAT's plans in expanding its market share and brand recognition in the U.S.
Q: With the year nearing its halfway point, how would you describe business thus far in 2018?
A: For CEAT, this is a very important year. We launched our ag radials in the U.S.A., and spring is the very first season for farmers to enjoy a superior ride quality on our tires with higher traction and low soil compaction. We have been on the road meeting our customers and channel partners; the response has been positive across the board.
Q: What are some of the pleasant surprises you are seeing in the industry? What has surprised you most?
A: Being the most recent entrant in the ag radial market segment, we expected tough resistance, especially after a longer than usual winter; but we have been surprised by the number of customers who are willing to try out our tires. Clearly there was room for a good quality product (at a very attractive price point and backed by a fantastic warranty assurance) in the market.
Q: Where do you see the industry markets heading during the last half of 2018?
A: The numbers in terms of farm acreage sown is flat this year, so we do not anticipate anything negative over last year. For us, there is only market share to be gained, so all positive.
Q: What kind of trends are you seeing in the marketplace? How is your company reacting to them?
A: In the ag tire space in the U.S., we see bias tires still remaining strong along with radials. For us this is great as we continue to invest both in radial and bias capacity and will continue to add both radial and bias products to our portfolio. This is exactly what our channel partners expect from us.
Q: What sectors look to be strong? Are they sustainable for the future?
A: We operate in the farm and OTR sectors. The farm sector is firmly holding ground and the construction sector is clearly in expansion mode. We see positive trends in terms of demand in both these sectors.
Q: Can you provide an update on the U.S. business unit in Charlotte?
A: We established our North America subsidiary in March 2017 with our corporate office in Charlotte, N.C. We always wanted to come closer to our customers in the U.S.A. and the launch of our ag radials through a brand new plant became the perfect opportunity for us to establish an office in the U.S.A., which of course is our most important region.
We have on the team James Enyart, a highly experienced ag tire industry expert in a technical role, and Theresa Kapper in the very important marketing and brand management role. There is a large team in India that supports all backend operations for North America to deliver top-notch services in a timely manner to our esteemed customers here in the U.S. The sales and operations team at Tyres International Inc. is our extended team on the ground to ensure quick response time to all customer needs.
Q: What's the progress of your new North American advertising campaign? How has it helped?
A: CEAT is a global brand in existence since 1924, but for most parts of the U.S., we are pretty much a startup with relatively little brand awareness. Therefore, it is imperative we must advertise to get the word out that we are now here as a local entity and ready to ramp up our presence both at the channel level and among the end-users in the farm and OTR space.
We do get inquiries for distribution on a regular basis and are actively expanding our reach within the U.S. through a careful selection of channel partners who would be keen to promote our brand, of course, with our active support in their markets.
Q: Do you expect to make any investments in the next six months?
A: CEAT is a publicly traded company in India and has announced major investments in capacity expansion to our ag radial, TBR, PCR plants and a new greenfield PCR project. All of these projects are already in various stages of commissioning.
In the U.S., all of our investment will be in spending as much time as possible with our customers, getting to know them better and helping build our mutual business with long-term sustainability as the goal.
Q: Is there anything else you would like to add?
A: Our ag radial plant is perhaps the most recent ag radial capacity added anywhere in the world, and we have the latest tire building machines. This leads to a very consistent production with minimal human intervention.
Our tires have gone through a series of internal and external quality evaluations before release to our customers, befitting a Deming Award winning company. (CEAT is the only tire manufacturer in the world, outside of Japan, to win the very prestigious Deming Quality Medal.)
We believe in the concept of FTR (first time right). and all our product releases will be first time right. In the launch year we released 72 of the top running tires in 85/70/65 series and will continue to add both radial and bias products to our portfolio at an accelerated pace.
CEAT has 100-plus scientists in our R&D team, supported by a world-class infrastructure to design and launch top-notch quality products at a great value.