Pirelli India To Stay Focused On Premium Segment

By Sharad Matade :

Pirelli India will continue to focus on premium vehicle tyres in India anticipating better growth in the segment. “We are here to cater to the premium vehicle segment, not to do a volume-driven business. Brand and quality conscious organisations will not change their core philosophy, though they may take time to cement their position in markets,” Sanjay Mathur, General Manager, Pirelli India, told AutoParts Asia.
Currently, the company sells its products through the appointed distributors and directly to European OEMs in India. “Our distributors and OEM customers import a wide range of tyres, and Pirelli India office acts a channel between them and the head office ensuring smooth operations,” he said. Pirelli India supplies its tyres to BMW, Mercedes, Audi, VW, Porsche, Jaguar & Land Rover, Ferrari, Lamborghini, and Volvo, among others, in India.
Almost 70 percent of Pirelli India’s total sales go to its OEM customers, and the rest to the replacement market. “The replacement market demand is generated through the OEM channels. Once the customers use and test our tyres, they will realise their quality and benefits. For replacement, they will naturally opt for Pirelli tyres. Once a Pirelli customer always a Pirelli customer,” he said.
Pirelli India has a bigger share in the premium tyre segment than its peers in the Indian market, Mathur said. He declined to share the sales volume, but said the growth has been satisfactory. “We grow at the rate of 20-25 percent annually and expect to keep this momentum in the next two to three years,” he said.
Price sensitivity of the customers is a key component of the marketing and sales strategy for any company in the Indian market, though for Pirelli India’s customers are not a major challenge. Customers pick up premium tyres at premium prices considering long-term benefits for their luxury cars. “Since the company has been targeting OEs, that too the premium segment, price sensitivity is not an issue for us, even in the replacement space,” Mathur said. After realising the benefits of the high-performance tyres, the premium vehicle owners prefer such tyres for their non-premium vehicles also, he said.
The Indian auto market dynamics are expected to change with the growing economy and the people’s purchasing power, particularly of the Y Gen. Though the Indian market is known for first-time car buyers, growing thrust on comfort and aesthetics force even non-premium car manufacturers to launch high performance cars. “A few decades ago there were only a couple of vehicle manufacturers and the people had no choice.That has changed,and the vehicle companies are narrowing their focus on better products as the customer is king now. The Indian market used to be volume-driven. A shift to quality market will take time. The penetration of premium products will pick up with the growing taste for comfort, awareness of safety and upcoming regulations,” Mathur said.
Premium tyres are10-15 percent more expensive than regular or economic tyres. “Though the initial cost is higher, Pirelli tyres offer better safety and life, and save fuel, which eventually bring down the total cost of the tyres,” said Mathur. Pirelli India’s products sold in India are made according to international standards.
Indian tyre manufacturers are also entering the premium tyre segment. Mathur thinks the growing competition in this segment will enhance the demand and market size.
Pirelli India sees good potential for two-wheeler tyres. Though less-powered motorcycles dominate the domestic market, higher cc engine bikes are finding their own space. “There are two distinctive groups in the motorcycle category. Less than 150cc, which dominates the market. They are bought for commutation, whereas the higher cc engine bikes are bought for passion. When passion is involved, mainly for higher cc bikes, people are willing to pay more for the best quality,”Mathur said.
Unlike its European peers, Pirelli India does not have manufacturing facilities in India. “A manufacturing base is to cater to the domestic demand, targeting decent volumes, whereas we are here to cater to a niche market. We do not see the demand that will lead us to set up a factory now,” he said.
The company claims to have the widest range for the Indian market. “We can bring any size as per market requirements from our existing range to India, complying with all market regulations, within a short time,” Mathur added.
Expanding service centres across India is another major plan for the company. Pirelli India has recently opened a high-tech service centre in Gurgaon. The company’s service centres are equipped with automated tyre changing, wheel balancing, 3D wheel alignment, nitrogen inflation, battery support along with other tyre-specific services. “We will open such high-tech equipped centres wherever our OE customers ply their vehicles,” he said.
According to Mathur, the main challenge is to cater to a big market like India by competing with the domestic players. “It is not easy to compete with Indian tyre companies on a national level considering their wider presence.We have to be selective in expansion. Currency exchange rate fluctuation also impacts prices of imported Pirelli tyres,” he said.
Pirelli India is bringing 23 inch rim-size tyres which will be fitted on ultra-premium, high performance cars. He refused to divulge details of the vehicle but said it is likely to be displayed at the next Auto Expo in Delhi. “If the car is displayed, it will be with our tyres,” Mathur said.

Leave a Reply


This site uses Akismet to reduce spam. Learn how your comment data is processed.