22 Mar 2019 20:48 IST

CEAT tyres: On a roll

Ranked highest in customer satisfaction last year, the 40-year-old company has many firsts to its credit

Tyre manufacturers the world over face and overcome the same set of problems. Right? Wrong. Indian tyre manufacturers face an extra and almost insurmountable factor referred to comprehensively as the ‘Indian road condition’. CEAT has gone a step further by providing for the bewildering movements of pedestrians, who dawdle, dart or jump across the road, and hold up an imperative hand for right of way, depending on their mood.

That is why CEAT tyres were ‘born tough’ — to make ‘mobility safer and smarter, everyday’, according to their evolving taglines.

Origin and expansion

CEAT, however, did not start as a tyre company. ‘Cavi Elettricie Affini Torino’ (CEAT) was established in Turin, Italy in 1924 by Virginio Bruni Tedeschi. The name, CEAT, means ‘electrical cables and allied products of Turin’ — and the company began with manufacturing cables for telephones and railways. It entered the Indian market in 1958 as CEAT Tyres of India Ltd, the name was incorporated in 1979, in collaboration with the Tata Group. It aimed to manufacture tyres for all types of vehicles, inner tubes, flaps and repair material.

In 1960, the company commenced tyre production at its Bhandup factory in Mumbai. A research and development unit followed in 1972 at the same location. (There is another R&D unit at Halol now.) In 1981, Deccan Fibre Glass Ltd. was amalgamated with CEAT and the very next year, the RPG Group acquired the company.

The following years saw CEAT entering into collaborations with Japanese firms Yokohama Rubber Company and Toray Industries Inc., to develop radial tyres to suit Indian road conditions and setting up a factory for manufacture of nylon tyre cord fabric, respectively. The company changed its name to CEAT Ltd. in 1990.

Power of R&D

CEAT faced an uphill task trying to break into the truck tyres category as MRF and JK Tyres were already well-established in this space. Most dealers had long-term arrangements with these companies, including replacements, and the buyer/user automatically returned to the OEMs. CEAT decided to concentrate on the two-wheeler category instead and relied on its R&D department to come up with designs that would differentiate between ‘good’ grip — a perceived must in this category — and a ‘perfect’ grip. As user confidence increased and relations with the vehicle, manufacturers improved, the company’s fortunes took an upswing, enabling it to focus on other tyre segments.

All this was possible through CEAT’s strong research and development unit, which concentrated on developing breakthrough products. The company has many firsts to its credit, starting with the manufacturing of the first radial tyre in India using polyester tyre cord technology with steel belts to the latest ‘puncture-safe’ two-wheeler radial tyres. But its USP has always been the ‘superior grip’ — in both dry and wet road conditions — and thus safety, without compromising on comfort.

Its latest Gripp X3 bike tyre features an inner layer that provides strong grip even when the outer layer breaks down through usage. One of the products in the pipeline is a smart tyre equipped with sensors to evaluate the condition of the tyre, identify problems and offer corrective solutions to the driver.

Today, CEAT is a tech-savvy company manufacturing about 35 million tyres a year across all segments. It is the flagship company of the ₹22,000 crore RPG Group and contributes close to 30 per cent of its turnover. The product range covers world-class radials for two-wheelers, cars, three-wheelers (autorickshaws), heavy-duty trucks, LCVs, SUVs, farm vehicles (tractors, threshers), earthmovers, trailers, forklifts, go-karts and all-terrain vehicles. Its customer list includes the who’s who of users — Honda, Yamaha, Suzuki, PVPL, M&M, SIL, Atul Auto, Maruti, Renault, Hyundai, Datsun, Daimler India, Tata Motors, Ashok Leyland, Eicher, TAFE, Swaraj, Escorts, L&T, Caterpillar, BEML.

The brand’s products are exported to more than 130 countries, especially in the truck, OTR and LCV categories. It has won the CAPEXIL Export Award, sponsored by the Ministry of Commerce and Industry, India.

Earnings and growth

CEAT recorded a turnover of ₹6,330 crore in 2018, of which about a third of the revenue came from the sales of bus and truck tyres, while the two- and three-wheeler segments accounted for 29 per cent.

The company has six manufacturing plants at Bhandup, Nashik, Halol, Ambernath in India, and Sri Lanka (where it operates through a JV, named CEAT Kelani Holdings Company Pvt Ltd), besides setting up a greenfield facility in Chennai. It has 10 outsourcing units for tubes, tyres and flaps and three dedicated two-wheeler and three-wheeler plants.

CEAT’s distribution strategy is based on the FMCG model, going via distributors to reach more than 4,500 dealers and about 30,000 sub-dealers. CEAT products are also available through the exclusive CEAT Shoppe network, a retail channel with more than 200 outlets. It has also started a ‘Truck Service Hub’ at Raipur, Chhattisgarh for sales and repair, realignment, balance and health inspection services for truck and bus tyres.

Promotion and strategies

CEAT has always promoted its products through successful ad campaigns and promotions. It has been closely associated with cricketers such as Shikar Dhawan, Suresh Raina, Rohit Sharma, Ajinkya Rahane and, recently, Mayank Agarwal. Between 2015-18, the brand was the sponsor for the strategic-timeout for the Indian Premier League.

Its innovative three in one ‘barricade-stretcher-changing room’ safety banner for the Kumbh Mela won appreciation from everyone. This multipurpose safety device transformed into a stretcher, barricade or changing room, depending on the need. Its popular campaigns for utility vehicle and motorcycle tyres — like the ‘nimbu mirchi’ and ‘idiot-safe’ ads — won many awards for best campaign. CEAT also won customer approval by combining promotion with safety awareness as it launched the nation-wide campaign, ‘Drive Safe Dad’.

CEAT is reportedly the first Indian tyre company to start a mobile app that provides information about tyre care, safe driving suggestions and geo-location services to track down CEAT dealers, petrol pumps and ATMs. It includes a ‘CEAT Cricket Rating Segment’ for lovers of the game!

The company’s activities on the CSR front are numerous. These are generally focussed in and around CEAT manufacturing facilities and are slotted under specific categories.

The women empowerment programme, ‘Swayam’, promotes gender diversity at the workplace, training women as drivers, delivery personnel and fork lift operators. ‘Roadsmarrt’ is an initiative launched at schools across Mumbai to educate children — future vehicle users — about road safety.‘Jeevan’ is an integrated, holistic community development project creating sustainable assets through provision of clean drinking water, sanitation, health and nutrition.

CEAT imparts functional English knowledge to children from marginalised backgrounds in more than 30 government schools across Maharashtra, Gujarat and Rajasthan through its project ‘Pehlay Akshar’.

It is a very good employer, offering workers flexible working hours and actively involving their families in welfare schemes. It is no wonder that it has won the National Excellence Award for employee relations from the Employers Federation of India.

Product certifications

CEAT is the first and possibly only tyre company in India to be awarded the International accreditation ISO/TS 16949 – 2002 Quality Standard Certification and a TUV certificate, besides holding the ISO 9001, ISO 14001 and OHSAS 18001 certifications.

The company has won several awards, in categories as diverse as HR, advertising, quality, marketing, supply and exports, and also bagged first prize for ‘Best Maintained Traffic Islands’ from the Tree Authority of India and Municipal Corporation of Greater Mumbai. It is the first tyre manufacturing company in the world outside Japan to receive the ‘Deming Prize for Total Quality Management’ in 2017. CEAT’s products received yet another quality stamp of confirmation when the company was ranked highest in India for Original Equipment (OE) tyre customer satisfaction, in a study by JD Power.