Satya Srinivasa Rao: CEAT is committed to cater Nepal’s requirements

The Indian international tire brand CEAT has been present in the Nepali market for over one and a half decades. CEAT is the flagship company of the RPG Group. Satya Srinivasa Rao, Vice-president, International Business of CEAT India was recently in Nepal for a business visit. ApEx sat with Rao to talk about the Nepali tire market and CEAT’s plan for Nepal. Excerpts: How is the market of CEAT in Nepal? What growth prospects do you see in Nepal? We have been in the Nepali market for 15 years now. Our progress in Nepal has been good over these years. But last year, the business of tires went through a downturn due to import restrictions imposed by the Nepal government. However, our distribution channel is intact as the distributors have done a great job. And this year, we are again ready to see good growth. The CAGR (compound annual growth rate) of CEAT in Nepal has been above 14 percent in the last decade. This year, we are looking for a growth of above 20 percent.

What is your market share in Nepal?

We command around 20-22 percent of the share of the Nepali tire market. I am only talking about the passenger vehicle, two-wheeler, and truck segments excluding the agricultural vehicles segment. We have two distributors in Nepal, and they are tied up with over 400 local dealers who help us in the supply chain. In which segment do you see the biggest growth potential in Nepal? We have been very strong when it comes to passenger vehicle and two-wheeler segments. In two-wheelers, we are leading the market occupying a large market share. In passenger vehicles too, we are among the leaders. When it comes to commercial vehicles, we still have some grounds to cover, I must say. I would say we are in the third position—MRF being the first, followed by Apollo. However, we are trying to reach out to direct customers and expand our share of the market. Tell us about the innovation and customer service of CEAT.  We are not doing any specific product innovation for Nepal because the market here is almost similar to India. If we sell 100 types of products in India, around 90-95 percent of them also get sold in Nepal. But when it comes to services, we are ready to provide top-notch customer services. The new CEAT shop is a signature showroom of CEAT. We provide all tire retail services under one roof here. Customers can also look up various variants of CEAT tires from the showroom. How is CEAT doing in India? In India, our progress has been very good in the last five years. Similar to Nepal, we are No. 1 in two-wheelers. For passenger vehicles, Apollo and CEAT are neck-to-neck in the second position. We have made great progress in passenger vehicles because we are reasonably new in the market as we entered this category after 2008 only but other companies were in the market for a longer time. CEAT has not left behind Indian players only but multinational companies too. In commercial vehicles, we are slightly behind in the Indian market. But we are hoping to do better in the coming years. What is the contribution of your exports to the total business? We are currently in around 115 countries across the globe and around 16 percent of our total business is from export. Tell us about CEAT’s electric vehicle (EV) specific tire ‘Energy Drive’. Lately, every company has started focusing on EVs. Not only automobile companies but tire manufacturers too. The share of EVs in the automobile industry is expected to go up drastically in the next few years. We want to be leading the race when it comes to EV tires. Hence, CEAT has come up with Energy Drive tires specific to EV vehicles. We are glad to cater to the requirement if Nepal needs EV tires.