MRF TYRES

INTRODUCTIONINTRODUCTION

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MRF Ltd., incorporated in 1960 to take over the business of the

Madrass Rubber Factory, MRF later went public in 1961. The company has

its works at Tiruvottiyour, Arakkonam, medak, kottayam and Goa. The

Company manufactures tyres and tubes in collaboration with Mansfield

tyres and Rubber, US. Its products include Nylogrip. Zigma, Tyredrome, etc.

Its subsidiary companies are Funskool (India), MRF Corp and MRF

International.

MRF diversified into conveyor belts in collaboration with Pierelli,

Italy, in 1991-62, tied up with Vapocure, Australia, to manufacture

polyurethane paint formulations and later into tyre machines in collaboration

with Abex, US. It also diversified into speciality surface coatings, conveyor

belts and leather.

MRF is planning to take over Dunlop, which is a BIFR company. It

has undertaken a study to examine Dunlop’s operations before firming up

its stand on the issue,. MRF is to extend support to the manufacturers,

including investing in like moulds and to finalize a proposal for

development of area tyres for different aircraft with the IAF in consultation

with DGAQA ( Directorate General of Air Quality Assureance.) It has

launched a steel-belted premium radial ty8re variant called MRF ZVTS’.

While this tyres augments the company’s overall range of radials, it also

marks a step forward in terms of technology, performance and superior ride

quality, ZVTS in available in more than 11 sizes to fit all Maruti vehicles

and Fiat, GM, For, Honda, Hyundai, Mitsubishi and Daewoo cars, ZVTS

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has been develope4d especially for Indian road conditions. It has become an

original equipment supplier of radial tyres to Tata Indica,. MRF has been

selected as one of India’s Top 10 companies for the sixth consecutive year

by the Far Eastern Economic Review’s annual “ Review 200”.

More than 1,500 owners of 28 different vehicle models participated in the

2004 study, which was fielded from June to August, 2003.A new model of

customer satisfaction measurement was deployed for 2004. Overall tire

performance is assessed on 20 attributes, grouped into five predefined

factors: ride, handling, traction, durability, and appearance.

A design and quality built for heavy overloading conditions, have

proved to be ideal for operations in Bangladesh MRF tyres have earned the

reputation of being the best suited tires for Bangladesh and are preferred by

transport operators for their cost effectiveness. With the setting up of its new

show room in Dhaka, MRF moves closer and will help to service its

customers in Bangladesh better.

MRF claims that it has launched the broadest radial car tyre ever to be

manufactured in India. MRF ZVRL, the 265/70 Ri 5-size radial tyre, has

been tested and approved by Ford’s international standards. These broad

MRF tires come as 100 per cent fitment on the Ford Endeavour, says a

release from the company. These tires compete with imported brands, which

were the only tires available in India in this segment until recently. This is a

premium radial, which can also be fitted on Scorpio and Safari vehicles,

without necessitating the change of OE (original equipment) rims, the

release adds.”

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Unlike past years, the study deals only with radial tires, as nearly all

new passenger vehicles sold in India are now fitted with radial tires,” JD

Power said.

MRF TYRES has been selected as one of the India’s

TOP 10 companies for the sixth consecutive year by the far

EASTERN ECONOMIC REVIEW’S ANNUAL “Review ‘.It

is presently under the leadership of Arun Mammen, son of the late

K.M. Mammen Papillae.

MRF has today taken the path of self-reliance and successfully

developed indigenous technology to produce world class tires MRF received

the highest ratings in the study in four of the five factors determining overall

satisfaction with tires: appearance, durability, traction, and handling.

Bridgestone, JK Tyre, and Goodyear followed MRF in the rankings.

Maintenance of high quality standards and constant innovation has become

synonymous with the organization, giving all its products the unique status

of highest brand preference solely due to their superior quality, performance

and durability. MRF has won the J.D.Power Asia Pacific Study [Study based

on a total of 2500 new- vehicle owners of 11 makes and 31 different vehicle

models in India.] for 5years-2004,2005,2006,2007,2008 in 7years.This is the

trust that drives MRF to raise the bar of quality and performance year after

year.

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HISTORYHISTORY

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The MRF LIMITED factory & Regd. Office is situated at 124,

Greams Road, Chennai-600006. The company’s performance in past few

years can be described as follows:

1946 A young entrepreneur, K. M. Mammen Mappillai, opened a small toy

balloon manufacturing unit in a shed at Tiruvottiyur, Madras (now Chennai).

1949 Although the “factory’ was just a small shed without any machines, a

variety of products, ranging from balloons and latex-cast squeaking toys to

industrial gloves and contraceptives, were produced. During this time, MRF

established its first office at 334, Thambu Chetty Street, Madras (now

Chennai), Tamil Nadu, India.

1952 MRF ventured into the manufacture of tread rubber. And with that, the

first machine, a rubber mill, was installed at the factory. This step into tread-

rubber manufacture, was later to catapult MRF into’ a league that few had

imagined possible.

1955 MRF soon became the only Indian-owned unit to manufacture the

superior extruded, non-blooming and cushion- backed tread-rubber, enabling

it to compete with the MNC’s operating in India at that time.

1956 The quality of the product manufactured was of such

L a high standard that by the close of 1956, MRF had become the L market

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leader with a 50% share of the tread-rubber market in India.

So effective was MRF’s hold on the market, that the large multinationals

had no other option but to gradually withdraw from the tread rubber business

in India.

1961 The quality of the product manufactured was of such a high standard

that by the close of 1956, MRF had become the market leader with a 50%

share of the tread-rubber market in India. So effective was MRF’s hold on

the market, that the large

multinationals had no other option but to gradually withdraw from the tread

rubber business in India.



share of the tread-rubber market in India. So effective was MRFs hold on the

market, that the large multinationals had no other option but to gradually

withdraw from the tread rubber business in India.



share of the tread-rubber market in India. So effective was MRFs hold on the

market, that the large multinationals had no other option but to gradually

withdraw from the tread rubber business in India.

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1967 MRF became the first Indian company to export tyres to USA - the

very birthplace of tyre technology.

1973 MRF scored a major breakthrough by being among the very first in

India to manufacture and market Nylon tyres passenger tyres commercially .

1978 MRF developed the MRF Superlug-78, a sturdy tyre for heavy-duty

trucks. The tyre was a significant improvement over its existing products,

and went on to become the country’s largest selling truck tyre in later years.

1979 MRF developed the MRF Superlug-78, a sturdy tyre for heavy-duty

trucks. The tyre was a significant improvement over its existing products,

and went on to become the country’s largest selling truck tyre in later years.

1980 MRF entered into a technical collaboration with the B.F. Goodrich

Tyre Company of USA, which was involved with the development of tyres

for the NASA space-shuttle. With this began a significant exercise in quality

improvement and new product development. MRF took a major policy

decision to be aggressive on the racing circuits.

1983 MRF began a rapid product development programme for new vehicles

entering India.

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1984 Sales crossed INR two billion. MRF tyres were the first tyres selected

for fitment onto the Maruti Suzuki 800 - India’s first small, modem car.

1985 MRF Nylogrip tyres for two-wheeler vehicles were launched.

1986 MRF was selected by the National Institution of Quality Assurance for

their most prestigious award. Pitted against 20 tyre companies worldwide,

MRF also won six Quality Improvement Awards instituted by the B.F.

Goodrich Tyre Company from USA.

1987 MRF crossed the INR three billion mark and also became the No. 1

tyre company in India. MRF Legend, the premium nylon car lyre was

introduced.

1988 The MRF Pace Foundation was set up, with international pace bowler,

Dennis Lillee as its Director. Not long thereafter, pace bowlers trained at the

Foundation were selected for the Indian Cricket Team.

1989 By 1989, MRF was the clear market leader in every lyre segment.

Once again, in recognition of excellence, MRF was awarded the

Visvesvaraya Award for the Best Business House in South India and the

Economic Times Harvard Business School Award for the Best Corporate

Performance. MRF collaborated with Hasbro International USA, the world’s

largest toy makers, and launched Funskool India. The company also entered

into collaborations with Vapocure, Australia to manufacture polyurethane

paint formulations and with Pirelli for MUSCLEFLEX Conveyor &

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Elevator Belting. MRF launched the MRF ZIGMA CC Radial

synchronising with the MRF World Series Cricket Tournament for the

Jawaharlal Nehru Trophy sposered by the company. The Chief. Minister of

Tamil Nadu, Dr. M. Karunanidhi, awarded MRF the Special Export Award.

MRF also opened the MRF Tyredrome, India’s first tyre company- owned

wheel care complex at Madras (now Chennai).

1990 MRF brought the 6th World Cup Boxing Championship to Mumbai -

the first of its kind - with 39 countries participating. The event was telecast

live on TV networks worldwide.

1993 K. M. Mammen Mappillai was awarded the Padmashri Award of

National Recognition for his contribution to industry - the only industrialist

from South India to be accorded this honour until that time. MRF also

became the first tyre company in India to cross the INR 10 billion mark. In

addition, the company was voted by the Far Eastern Economic Review, as

one of the ten leading Corporate Groups in India and a Leader in Asia. MRF

was selected as one of India’s most admired Marketing Companies by the

readers of the A & M magazine.

1995 The company’s turnover crossed INR 15 billion. MRF was chosen for

fitment on the Daewoo Cielo. This year too MRF was voted by the Far

Eastern Economic Review as one of the 10 leading Indian Companies.

1996 In the Golden Jubilee year, MRF’s turnover crossed the INR 20

billion milestone. A special factory dedicated entirely to the manufacture of

radials was started at Pondicherry. MRF Tyres were also chosen for fitment

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on the Ford Escort, Opel Astra and Fiat Uno. Further proof of its superior

quality.

1999 MRF was declared the most ethical company by

“Business World” magazine in its survey.

2000 MRF’ launched the Smile campaign on Indian roads.

2002 MRF’s turnover crossed INR 30 billion mark.

2004 MRF won J.D. Power Asia Pacific study along with

Bridgestone for the customer satisfaction. Mrf Ltd. has informed the

Exchange that at its meeting held on December 19, 2003 the. BOD have re-

designated Mr. Arun Mammen as Managing Director of the Company w.e.f

April 01, 2004.

2007 MRF received the highest rankings in the study in four

of the five factors determining overall satisfaction with tyres appearance,

durability, traction and handling. Ties up with Maruti Udyog to boost

motorsports in India.

2009 MRF Ltd launches premium truck tire Super Lug 50- FS. The mere

mention of the word ‘MRF’ is bound to bring the Muscleman to the mind of

Indians. The soon after MRF began manufacturing tires. Over the past years,

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it has evolved from a mere corporate mascot to a symbol of streanth,

reliability and durability — embodying the very qualities of the tires it

represents. The Robotic muscleman introduced in the mid-80’s, a sign of the

changing times. His new appearance was silent testimony.

The muscieman’s appearance changed once again in 1996, MRF’s golden

jubilee year. He started appearing in full form, and came to be known

affectionately as the MRF Tyreman by motorists across India and 65

countries worldwide, who have come to rely on him for a safe comfortable

ride.

Then again in the year 2002 MRF has crossed the INR 30 billion mark

and from that onwards it has won Customer Satisfaction Award continuosly

for five years in seven years of J.D. Power Pacific Study.

Recently in 2008 MRF Ltd. Launched a near range of two wheeler

tyres called “Zapper”.

HISTORY BEHIND THE TRADEMARK

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The Birth of The MUSCLEMAN

In the 1960’s, the Indian tire market was completely controlled by the

large multinational companies. Around this time MRF opened a tyre factory

at Thiruvottiyur in Tamil Nadu. With , came the task of recognizing an

appropriate Corporate Brand Symbol: One that would distinctly represent

the Company’s culture, and convey the same to everyone in a country of

varied languages and cultures.

In this process of developing suggestions for the symbol, some enterprising

employees conducted an informal market survey, interviewing people from

all over the country about their expectations from a good tyre. The responses

ranged from the mundane to the mediocre.

But one day, a truck driver at a roadside dhaba (makeshift eatery)

somewhere in Weastern India hit upon the right idea when he said, “A good

tyre should have all the qualities of a Pahaiwan (strong man)”. And from this

simple statement, the muscleman was born.

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COMPANYCOMPANY

PROFILEPROFILE

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MRF Ltd. Is the first Indian company to export tyres to the US, the very

birthplace of tyre Technology. It is the first company in India to manufacture

and market Nylon tyre passenger tyres commercially. In 2004, the

company’s turnover crossed INR 30 billion mark. The company was given

the title of most ethical company by ‘ Business World’ magazine after a

survey conducted in 1999.

Founder K.M.Mannen Mappillai

Country India

Year of Establishment 1946 as a toy factory

Industry Tyre Manufcturing

Listings and its codes NSE:MRF; BSE:500290

Registered Office 124, Greams Road

Chennai-600 006

India

Tel.: +(91)-(44)-28292777

Fax: +(91)-(44)-28291844/0562

Website www.mrftyres.com

www.mrf-export.com(MRF Export)

Related Website

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http://www.mrftyres.com/

Segment and Brands

Truck / Bus Tyres

Light commercial,Jeep and Utlity Vehicle tyres

Passenger Cars Tyres

Off the road tyres

Two-Wheelers Tyres

Farm Service Tyres

MRF International offices

Bangladesh

#69/k.Green Road

PanthaPath

Dhaka

1205

Bangladesh

Mobile: +( 880)-173000810

E-mail:[email protected].

Untied Arab Emirates

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OBJECTIVES OFOBJECTIVES OF

THE STUDYTHE STUDY

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1. To study attitude and satisfaction among the consumer for mrf tyres

2. ]to study and analyse various factors influencing the consumer to purchase the mrf tyres

3. To analyse the factors influencing perception and buying

4. Find out effectiveness of advertisement

5. To study attempts to find the reach of mrf tyres which would help the company in formulating suitable strategies

6. Study also identifies the attitude and preference pf consumer

7. The study finds the different types used in promotion through which product reaches the end user.

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PRODUCTIONPRODUCTION

DEPARTMENTDEPARTMENT

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Production Management is concerned with the acquisition & the

use of the physical resources employed in the provision of goods &

services. Production Management will normally be responsible for the

management of inventories , quality, the maintenance & replacement

of faéilities & scheduling of activities as well as responsibility for

location, layout, capacity & managing of a system. Managers working

in this function will also normally have some involvement in the

design/specification of a product or services process, manning prices

& measurement performance .

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Production process

“Raw-Material converted into finished product is called as

production process.”

Inputs are men, materials, machines, drawings, instructions &

paperwork. The transformation process involves operations

mechanical to convert inputs into outputs. It also includes activities

that assist conversion.

E.g; 1. Planning &Control of factor of production.

2. Procurement of material.

3. Receipt, Storage & issue of material.

4. Material handling.

5. Inspection of in-process & parts.

6. Assembling & testing of product.

7. storage of finished goods.

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PRODUCTION INFORMATION

RAW – MATERIAL

Apart from being capital intensive, the tyre industry is also raw

materials accounting for about 70% of the cost production. Labour

cost is another significant overhead. The Tyre industry has a narrow

product range, huge operating overheads and high break-even levels.

The major Raw materials used are natural rubber, nylon tyre cord,

carbon black, synthetic rubber Raw material costs for the last three

years have been rising constantly, especially those of rubber and crude

oil-linked raw materials. The steep rise in raw material prices has

impacted profit margins of all players. Consistent rise in major raw

materials costs with limited pricing flexibility, has resulted in pressure

on margins of tyre companies, despite a good topline growth.

Consequently, while the revenues showed a healthy growth,

profitability remained depressed. In fact, some of the major tyre

companies are operating at break-even situations. The following is the

brief description of the major raw materials;

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RUBBER PRICES

In 2007-08 production and consumption of rubber grew by 5.5% and

6.2%, respectively, while exports increased by 51.2% (for the same

period), on account of the imbalance in the global demand-supply

position. The average domestic price of rubber increased by 20.3%,

while the international prices soared by 31.5% in the same period. In

April-June 2006, Domestic-Rubber prices increased 59% y-o-y, while

the international prices increased 76.6%.

Natural-Rubber prices have been continuously on the rise in the

international markets, with weather conditions playing a major role in

disrupting supplies. During FY06, China lost rubber plantations in the

Hainan province due to a typhoon in September 2007, followed by

floods in Thailand and Malaysia in December, the same year.

Production suffered in most rubber-producing regions in India, due to

bad monsoons, which in turn led to the soaring of rubber prices. With

international natural-rubber prices ruling high, and India being a part

of the global market, exports of rubber from the country affected the

demand and supply positioning in its domestic market. The growth in

exports is driving-up average domestic prices of rubber. With rising

demand from the Tyre sector, the supply situation is expected to

remain constrained in the medium term. Currently, rubber prices have

depleted to around Rs.80- levels, but there is high level of volatility

and hence, their behaviour is difficult to predict. If current levels

persist, it would result in better profitability for tyre companies.

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Nylon Tyre Cord (NTC) Fabric.

Nylon tyre cord accounts for around 22% of the total raw

material costs. During 2007-08, the production of NTC fabric

declined by 12.2%, while its consumption grew by 9%. This

imbalance in the production-consumption pattern has led to a 7.5%

increase in domestic NTC prices in 2005-06. The international prices

are much higher than domestic rates and have shown a 15.2% increase

in 2007-08 the price of caprolactam, the main feedstock for NTC

fabric, increased by 6.2% in the same period. However, the average

international anddomestic prices during April-June 2006 were lower,

by 22% and 18%, respectively, due to carpolactarn prices, which

declined by 10.8 %.

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OTHER RAW MATERIALS:

The prices of other raw materials like carbon black, styrene

butadiene rubber (SBR) and poly butadiene rubber (PBR) are closely

linked to global crude oil prices.

The average domestic price of carbon black increased by 7.7%

in2008-09 and the average international prices of both SBR

and PBR increased by 16.9% and 13.4%, respectively, during 2008-

09. During April-JuneO6, the average domestic price of carbon black

increased by 27.2% and this momentum is expected to continue. The

average international prices of both SBR and PBR fell by 10% and

1.4%, respectively, during April-JuneO6. The prices are expected to

be in line with global oil prices.

The risks & concerns are rising due to the rise in Raw Material

prices. The consistently rising natural-rubber and crude oil prices.and

the resultant increase in petroleum-based inputs has been posing a big

challenge to tyre operators. In a move to protect their profitability, the

players have increased tyre prices by 20%, across categories.

However, the continuously rising trend witnessed in the prices of raw

materials remains an area of concern. Though the rubber prices have

come down from their peaks of Rs.1 15, to Rs.82 currently, the trend

is very volatile. Tyre companies would definitely show improvement

in the margins, sequentially, and if prices remain at these levels,

profitability would improve. But then, it is highly dependent on the

prices of major raw materials like Rubber, Carbon Black, NTC Fabric,

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SBR and PBR, which are highly volatile. However, with surging

automobile sales, if demand for tyres increases without the supply

catching up with it, then, prices of tyres are likely to increase. This

may provide some benefit to the tyre companies.

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FINANCE

DEPARTMENT

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INTRODUCTION TO FINANCE

FINANCIAL MANAGEMENT is that part of management

which is concerned mainly with raising funds

- in the most economic & suitable manner. Using these funds as

profitability as possible : planning future operations & controlling

current performances & future developments through financial

accounting , budgeting , statistics & other means. It holds

importance as it has an impact on al the activities of a firm. Its

primary responsibility is to discharge the finance function

successfully & it also touches on all other business functions. All

business decisions have financial implications and a single

decision may financially affect different departments of an

organization.

According to Hunt Williams & Donald Sons;

“Finance function is defined as a task of providing funds required

by an enterprise on the terms most favourable to it in the light of

the objectives of the business”.

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According to Archer & Ambrosiv,

“Financial Management is the application of planning & controlling

functions to the finance function”.

Thus, Financial Management is that specialized function of general

management which is related to the procurement of finance & it’s effective

utilization for the achievement of the common goals of the oranisation.

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RESOURCES OF FINANCE

The Migration research Foundation focuces on receiving project

specific funding, and efforts are made to secure financial support in the

regions where they conducted. For projects of particular significance to

conservation (i.e., Critically endangered species and habits) , MRF seeks

international support when local funding is insufficient. Telemetry units and

data retrieval are very costly, and it is critical to secure the support of all

interested parties.

The foundation will ensure that its projects are managed efficiently

and that its operating costs are maintained at a level no higher than 20% of

the total operating budget. MRF is committed to focusing the vast majority

of its financial and human resources towards the development,

implementation and completion of scientific research projects. All profits

derived from tracking contracts for third party organizations will be directed

towards the foundation’s operating costs. The IRS recognizes MRF as

United States 501© (3) registered charity and as a Canadian registered

charity with the Canadian Customs Revenue Agency.

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SOURCES OF FUNDING

(1) Government

Governments are faced with needing to publicity involving a third party,

they show they are handling the situation in objective and non-political

manner. Government realizes that properly done research is expensive and

designate funds each year for such work. MRF will take advantage of this

public need to obtain long-term funding and expand the foundation’s

reputation for high quality scientific work.

(2) Corporations

Corporations are an effective public relations tool, as they

demonstrate the corporation’s active participation in environmental

protection and giving back to the communities in which they operate. The

general public is increasingly focused on this corporate community

responsibility. Corporations can feel secure that funds donated to MRF will

be used for sound scientific research without emotional or political bias.

(3) Public and Private Foundation

There numerous foundations that sponsor conservation research via funds

dedicated to individual projects. Such organizations are important for the

support of specific research proposals developed by MRF. For projects

conducted in partnership with other organizations, MRF will arrange for

joint fundraising campaigns, as projects with two lead partners have greater

potential for securing the necessary financial support.

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(4) Creative Funding Campaigns.

The directors will develop creative fundraising campaigns to establish

new partners and promote continued support from current sponsors. An

example of such a campaign is entering into a partnership with regional

wineries to obtain royalties off the sale of specially labeled wine, if you have

ideas that pertain to this type of joint venture.

(5) Individual Donors

The private sector is an important source of funding for MRF. If you

would like to contribute, please visit our.

HOW YOU CAN HELP section to make a donation. Your financial

commitment is greatly appreciated, and fully tax- deductible under the

applicable laws of Canada and THE UNITED STATES. Unfortunately, at

this time we are only able to accept donations in U.S. or Canadian dollars.

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CURRENT SENARIO

MRF Limited, Indias largest tyre company and the 15th largest tyre

company in the world. Today MRF is at its peak, it is the only market leader

among tyre manufacturers in India, with a 24% share in terms of revenues.

Its leadership position, coupled with its strong brand recall and high quality,

MRF commands the price- maker status. MRF has a strong presence in the

T&B segment, the largest segment of the tyre industry. It is the leader in the

two! three-wheeler segment (including

motorcycles) and tractor front tyres, and holds second place

in the passenger cars and tractor - rear tyres. MRF has

emerged as the sole supplier of truck tyres to Volvo. It is the largest supplier

of radial car tyres (40% share) to Telco’s Indica, with a monthly supply of

10,000 tyres. The Company has a distribution network of 2,500 outlets

within India and exports to over 65 countries worldwide.

India Vs Global The global tyre market currently is estimated at USD

70 billion while the Indian market is around Rs. 100 million. The global

market is dominated by Goodyear-Sumitomo with a share of 22%. On the

other hand, the domestic industry is dominated by MRF Ltd. Several

mergers and acquisitions have characterized the global market, in the recent

past. Current Scenario Pricing .

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Scenario Pricing is influenced by the demand. Since the tyre demand has

not significantly increased in the last one year, many of the tyre companies

have surplus stocks.

Hence, in the last 2-3 months the lyre companies are offering

discounts between 20 to 40 percent to car manufacturers, but the car

companies are trying to squeeze more discounts. The cheap imports of non-

radial tyres especially from China, South Korea, Japan, Thailand and

Indonesia, which sell at very low prices, have been posing a challenge to the

industry. India’s signing of the Bangkok agreement with ASEAN countries,

in October 2003, intensified the import threat, as this agreement provided for

preferential customs duly of 15% for imports from China and South Korea,

along with Sri Lanka and Bangladesh, as against the standard rate of 20%.

This led to a gush of imported tyres from these countries. The landed price is

approximately 25% lower than that of the corresponding Indian Truck/LCV

tyres. Imports from China now constitute around 5% of the market share.

However, Chinese tyres do not come with any warranty and the life of these

tyres is significantly lower than that of Indian tyres. In a move to bring about

quality control in the lyre industry, the ISI mark has been made compulsory

for tyres. This would effectively rule-out the sale of foreign tyres and thus

result in reduced lyre-imports.

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Hike in Tyre Prices:

The rising raw material prices have been the key concern for the tyre

industry, especially due to the lack of pricing flexibility. Since the tyre

industry is highly competitive and price sensitive, players have been very

conservative about increasing the prices. However, after the constant rise in

raw material costs, almost every player has, in different branches, stepped up

their product prices. In 2006-07, the average tyre prices have been hiked

thrice and the cumulative increase in truck & bus tyres is 4.6%, in car nylon

is 1.2% and in car radial tyres is 5.1 %, over the same period last year. The

price hikes in 2007-08 have resulted in a cumulative price hike of 20%

across all categories, by almost all players, with MRF an exception, which

did not increased prices in July O6. Combined with the price hikes, if the

current price-levels of raw materials persist, it would result in better

profitability for tyre companies. There also exists a possibility of tyre

companies rolling back the price hikes, since the prices of rubber and oil-

related raw materials have come down. However, it is very difficult to

predict rubber and other raw material prices.

MRF Ltd has informed that the Board of Directors of the Company at

its meeting held on October 25, 20 inter alia, has declared 30% second

interim dividend on the paid-up capital of the Company.

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MRF Ltd. has informed regarding the

standalone Results for the quarter ended on 3O-JUN-2008 ás

follows: Net Sales of Rs.1 13 343/- for quarter ending on 30-

JUN-2009 against Rs.99477/- for the quarter ending on 30- JUN-2007 Net

Profit / (Loss) of Rs.4250 lacs for the quarter ending on 30-JUN-2009

against Rs.817 lacs for the quarter ending on 30-JUN-2008.

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TECHNOLOGY

The tyre industry has evolved from the more basic cross ply to

the more sophisticated radial tyres. Nylon cords that impart low

weight and additional strength to the tyres have also replaced Cotton

piy. Nylon tyre cord accounts for around 22% of the total raw material

costs. During the production of NTC fabric declined by 12.2%, while

its consumption grew by 9%. This imbalance in the production-

consumption pattern has led to a 7.5% increase in domestic NTC

prices in 2005-06. The international prices are much higher than

domestic rates and have shown a 15.2% increase in 2005-06; the price

of caprolactam, the main feedstock for NTC fabric, increased by 6.2%

in the same period. However, the average international and domestic

prices during April- June 2006 were lower by 22% and 18%,

respectively, due to carpolactam prices, which declined by 10.8

%.This industry is strongly linked to the automobile sector and is also

driven by agricultural and infrastructural activity that takes place in

the region, as these two have an impact on the transport sector.

In terms of technology, radial tyre usage has been catching up

at a quick pace in the global market. Almost all the automobile

segments have shifted to radial tyres and the usage of cross ply is

restricted to trucks and buses only. On the other hand, in the domestic

market, the radial tyres are

44

BEING used only in the passenger car segment while the rest of

them still stick to the cross ply variety. This is because of the lower

price of cross ply and its re-treadability. In addition, the poor quality

of roads in India restricts the use of such tyres.

Radial Tyres are better, as they offer better fuel efficiency,

longer life and smooth movement on roads, together with working out

to be cheaper in the long run. The level of radialisation in passenger

cars is as high as 90%, but for commercial vehicles it is very low; in

T&B, it is only 2% (globally 65%). This trend has not really picked-

up pace, mainly because of poor road infrastructure, overloading, poor

vehicle maintenance, high costs involved and the requirement of

radial tyres for regular maintenance, in terms of checking air pressure,

balancing and realignment of wheels. Additionally, the industry

believes that vehicles with radial tyres cannot be overloaded to the

same extent, as can vehicles with cross-ply tyres. Radial tyres cost

close to 20% more than cross-ply tyres (Rs.2,000 more in the case of

MHCV tyres, and Rs.1,500 more in the case of LCV tyres). Hence,

the OEM(Original Equipment Manufacturer) segment has not pushed

radialisation, as radial tyres mean an elevated cost of around

Rs.10,000 for LCVs (5 tyres), Rs.14,000 for single-axle MHCVs (7

tyres), Rs 22,000 for double-axle MHCVs (11 tyres) and Rs.30,000

for triple-axle MHCVs. However, going forward, with the

improvement in the quality of highways, we expect radialisation to

gather.

45

Some momentum; levels of radialisation in MHCV is predicted

to be 10% in five years time, while in LCV, around 20%.

The future is expected to see many strategic alliances among the

domestic and global players to enable them to have access to latest

technology and expand their distribution network. A better

distribution will also ensure easy availability. The introduction of

newer auto models will significantly have a bearing on the tyres

demand. The tyre companies will also be looking for tie-ups with the

N OEM’s(Original Equipment Manufacturer) for better stability and

long-term relationship. For instance, the international player

Bridgestone has a tie-up with Tatas for supply of tyres for its model

‘Indica’. Bridgestone has entered the Indian market in association

with Associated Cement Companies and has set up a manufacturing

plant at Kheda in Madhya Pradesh. Ilyundai’s associate tyre

manufacturer is reported to set up operations at Sriperumbudur, in

Tamil Nadu. Other multinational tyre companies are also likely to

enter the Indian market viz. Michelin with J.K.Tyres and Pirelli of

Italy, with Birla Tyres. Such arrangements are very essential if one

has to remain competitive. Companies are now giving emphasis to

innovation in product and process technology and to operational

efficiencies. The government’s emphasis on improving the road

infrastructure will facilitate the road.

46

Transport sector that in turn will brighten the prospects of the tyre

industry in the coming years.

Several mergers and acquisitions have characterized the global

market, in the recent past. This is essentially to acquire technology,

gain wider access to markets and be competitive. Indian players are

also reengineering their businesses and looking at strategic tie-ups in

this segment.

47

HUMANHUMAN

RESOURCERESOURCE


48

Human Resource Management (HRM) is the function within an organization

that focuses on recruitment of, management of, and providing direction for

the people who work in the organization.

Flippo’s definition: “It Is a process of searching for prospective employees

and stimulating and encouraging them to apply for jobs in an organization.”

Thus the purpose of recruitment is to locate sources of manpower to meet

job requirements and job specifications.

Factors affecting Recruitment:

1. The size of the organization.

2. The employment conditions in the community where the organization

is located.

3. The effects of past recruiting efforts which show the organization’s

ability to locate and retain the good performing people.

4. Working conditions, salary and benefit packages offered by the

organization.

5. Rate of growth of the organization.

6. The future expansion and production programs.

7. Cultural, economic and legal factors.

However these factors may be divided specifically as Internal and

External factors.

49

Internal Factors:

1. Recruitment policy of the organization

2. Human resource planning strategy of the company

3. Size of the organization and number of people employed

4. Cost involved in recruiting employees

5. Growth and expansion plans of the organization

External Factors:

1. Supply and demand of specific skills in the labour market.

2. Political and legal factors like reservations of jobs for specific sections

of society etc

Steps of a Recruitment Process:

Personnel recruitment process involves five elements:

1. A recruitment policy

2. A recruitment organization

3. A forecast of man’power

4. The development of sources of recruitment

5. Different techniques used for utilizing these sources & a method of

assessing the recruitment program

These five elements MRF Uses for recruitment :

1. Recruitment Policy: It defines the objective of the recruitment and

also provides a framework for the implementation of the recruitment

program. The policy should be based upon corporate goals and needs.

50

The criteria for selection and preferences should include merit and

suitability.

2. Recruitment organization: It is necessary to centralize the recruitment

and selection function in a single office. This will bring about

maximum efficiency and success in hiring. This centralized office is

known as the Employee Office or the Recruitment Section.

3. Forecast of Manpower: This usually specifies:

a, Jobs or Operations for which the person should be

available.’

b. Duration of their employment.

c. Salary to be offered & terms of the employment

d. Necessary factor and experience

4. Sources of Recruitment: There can be two kinds of sources for

recruitment:

a. Internal — This includes personnel already on the payroll

of an organization. Whenever there is a vacancy, somebody

within the organization fills in or is upgraded.

b. External — These sources lie outside the organization.

5. Methods of Recruitment: The possible recruiting methods can be

divided into three categories:

a. Direct — In this method, rec t”s visit colleges and

technical schools, e.g. Infosys, the Tata Group,

Accenture, IBM, Siemens and several other companies

maintain continuous relationship with institutions to hire

students for responsible positions.

51

b. Indirect — This involves advertising in newspaper, radio,

TV., journals etc. Advertising can be very effective if its

media is properly chosen.

c. Third Party methods — This include use of commercial

or private pjQymer ajieoçes, placement officials of

schools, recruitment firms etc. Friends and relatives of

present employees are also a good source from which

employees may be drawn as part of the “Buddy Referral”

programs.

52

MARKETING MARKETING


53

Marketing Management is a compound word which means to

manage the entire system of marketing.

The process of ascertaining consumer’s needs ,converting those needs

into product or services & moving the product or services to the end users to

satisfy needs of specific consumer segment with a emphasis on profitability

ensuring the optimum use of available resources in the organization.

Today’s market is customer oriented oriented. All the marketing

activities are carried out considering the customer in the mind. In order to

achieve the marketing objective, it is very necessary to have a clear picture

of customer’s buying behaviour. All commodity markets are heterogeneous,

some commodity are never in conformity with each other as far as their

nature, habits , test•, interest, income & mode of purchasing .So all

customers cannot be satisfied with the same product. In order to facilitate the

marketing of the product , the marketing manager divides a market into

homogeneous sub-sets of customer having common characteristics to serve

that sub-set concenterated.

54

MARKET INFORMATION

Although the tyre industry faces huge competition, price & cost

pressures and high entry barriers, the changing dynamics, with the growing

economy and the escalating auto industry, provide a fillip to the industry.

The zooming auto industry, with sales growing at a CAGR of 15.8% during

the 2002-06 period, has driven the growth in the tyre industry, keeping both

the OEM and replacement demand buoyant. The demand and growth for the

industry depends on primary factors like overall GDP growth, agricultural &

industrial production and growth in vehicle-demand and on secondary

factors like infrastructure development and prevailing interest rates. The

total number of vehicles on the road is constantly swelling, on the back of an

increase in road transportation, which would gain more momentum once

projects like the Golden Quadrilateral and NSEW Corridor project get

implemented.

The Indian tyre industry, comprising of 40 companies (47 factories) in

the organised and un-organised sectors, can be divided into two tiers; Tier-I

players (top 5 tyre companies) account for over 80% of industry turnover

containing a well diversified product mix and presence in all three major

segments, i.e. replacement market, original equipment manufacturers

(OEM’s) and exports. Tier-IT companies are small in size, concentrating

chiefly on production of small tyres (for two! three-wheelers, etc.), tubes and

flaps and the replacement market. The industry has a negligible.

55

Market share in the commercial vehicles lyre category and is around

20% in the two wheeler lyre category.

The Indian lyre industry has witnessed a CAGR of 7.7% over the last

decade. Though the replacement market has driven the industry growth for a

long time, the OEM market has seen a robust growth over the last three

years. The truck and bus market is the largest segment of the industry,

accounting for approximately 70%

of the industry turnover, in terms of value. Tyre production, in

tonnage terms, grew at a healthy rate of 8.7% in 2008-09 against

that of 2007-08. The medium and heavy commercial vehicle (MHCV) lyre

segment registered a growth of 7.7% while the light commercial vehicle

(LCV) and passenger car lyre segments registered a phenomenal growth of

14.8% and 14.7%, respectively.

A few years back the auto industry was sluggish and so also was the

lyre industry, but there has been a dramatic shift since the last 2-3 years. as

the vehicle production has considerably gone up. Economic expansion,

investments and road development have all contributed to this increase in

demand for vehicles. This, in turn, has helped the growth in the lyre

industry. However, although the lyre industry grew in terms of sales

volumes, profitability has been adversely affected due to a substantial

increase in raw materials costs, which accounted for 62% of the operating

income in 2001- 02, soared to over 70% in 2008-09 Hence, the growth in

sales volumes has not really added to the bottom line.

56

DEMAND FOR TYRES

The Demand Cycle

GROWING ECONOMY

Increase in income increase in demand increase in

Level, higher dis- of freight movement wear & tear

Posable income of tyres

Increase in dern- increase in corner- creates repla

and for passenger cial vehicles cement

cars demand demand for

tyres

increase in dem- increase in tyres

and for passenger demand from

car tyres OEMs

(Original Equipment Manufacturer)

creates replace- creates replace men

demand after ment demand

about 24-48 months about 12-18 months

57

INCREASE IN TYRE SALES

EXPLAINATION

Demand for tyres can be categorised under four segments -

Replacement Market (RM), the Original Equipment Manufacturers (OEMs),

Exports, and the Government. In FYO5-06, the replacement market

constituted 48.7% of tyre sales (by volume), followed by OEMs at 42.8%.

Exports constituted 8.2% and government sales were at 0.3%. According to

the products, the maximum tyre sales are in the Truck & Bus segment,

followed by Passenger cars and Tractor - trailers.

Traditionally, the replacement market has been the main growth driver

for the tyre industry, as also the major segment that consumes tyres;

however, with the recent escalation in auto sales, OEM demand too, has

been on a substantial increase, thus enlarging its share in the sales pie. Auto

sales have been growing at a CAGR of 15.8% during 2002-06, which has

driven the growth in the tyre industry, keeping the OEM demand buoyant.

Going forward, the automobile industry is estimated to grow at double

digits. This, in turn, is expected to keep demand, for tyres from OEMs,

buoyant. Looking at the global rail-to-road cargo scenario, in Europe,

roadways have an 84% share, while in India, currently, the ratio is 35:65,

which was 62:38, two decades ago. Also, with growth in roadways and with

projects like Golden Quadrilateral and NSEW getting implemented, there

would be a further shift in freight movement, from railroad to roadways.

This would lead to an increase in demand for automobiles and hence, the

OEM demand for tyres.

58

Replacement market to see sustainable growth:

The Replacement Market is one of the more sought-after markets by

Tyre players, since the margins are better, compared to those of OEMs (who

are relatively few in number and have a huge bargaining power).

Replacement demand, which comes from existing automobiles, has been

increasing for sometime now and is expected to do the same, going forward.

Replacement of tyres varies across categories, due to different life-spans of

tyres, which depends on reasons like

i. Road conditions

ii. Load carried

iii. Distance travelled

iv. Re-treading

The typical life of truck tyres is 40,000-45,000 kms or, on a general basis,

around 12 to 18 months. The replacement cycle is relatively longer for two-

wheelers and cars, ranging anywhere between 24 to 48 months. However,

the demand for radial tyres in cars has further augmented the replacement

cycle.

Here, it becomes important to talk about Re-treading, which is a

phenomenon of repairing the outer surface of the tyre in order

to increase its life. The cost of re-treading a tyre is around 20-25% of the

cost of a new tyre. A re-treaded tyre lasts for around 60% of the life of a new

tyre. Though the quality of tyre deteriorates on retreading, since it is highly

economical, it is highly resorted to, especially in the passenger car segment.

In the LCV/ HCV (truck) segment, re-treading depends on the type of

59

operator. For instance, for a single truck operator that operates over shorter

distances, mainly on inter-city and intra-state routes, re-treading is high.

However, the organised or large-fleet operators prefer to replace the tyres

after an average usage of 40,000-45,000 kms. These operators do not risk

using old or re-treaded tyres on long-distance trips because breakdowns

costs are immense. The substantial growth that the auto and tyre industries

have seen in the last few years is bound to keep the replacement demand

high, in the years to come. Similarly, the current growth in the auto industry

and mounting OEM demand would keep replacement demand further

buoyant, going ahead. Though the replacement market has driven the

industry growth for a long time, the OEM market has seen robust escalation

over the last three years. Going ahead, OEM demand is expected to be

buoyant while replacement demand would also see sustainable growth.

COMPARISION BETWEEN

MARKET SCENARIO OF VARIOUS

TYRES

MRF is the market leader among tyre manufacturers in India, with a

24% share in terms of revenues. Its leadership position, coupled with its

strong brand recall and high quality, MRF commands the price-maker status.

MRF has a strong presence in the T&B segment, the largest segment of the

60

tyre industry, and commands around 19% market share in the segment. It is

the leader in the two! three-wheeler segment (including motorcycles) and

tractor front tyres, and holds second place in the passenger cars and tractor -

rear tyres.

Appollo Tyres(AIL)

MRF Tyres is the second largest player in the Indian tyre industry,

with a market share of 22%, in terms of revenues, and the largest player in

the T&B segment, with around 22% market share and 82% of its product

mix coming from this segment. It also enjoys a strong brand recall. ATL

derives 80% of its revenues from the replacement market, where the

EBITDA margins are higher; hence, at operating levels, MRF Tyres has

better margins compared to those of its peers

JK Industries has a 17% market share, in terms of revenue, making it the

third largest player in the industry. The Company ranks first in the MHCV

and Passenger Car tyre segments, with 79% and 7% of its product mix

coming from these segments, respectively

CEAT

CEAT has a 14% market share, in terms of revenues, and is an

average player across categories. 68% of its product mix comes from the

MHCV segment. Its leading brands in the T&B segment are Lug XL, Mile

61

XL and Rib XL, Secura in two-wheelers and Formula-1 in passenger radials.

In terms of profitability, CEAT has lower margins compared to its peers, in

spite of deriving 60% of its revenues from the replacement market.

Goodyear India.

Goodyear India, with presence across the globe, has a market share

of 6% in the Indian Tyre industry, in terms of revenues. It has a significant

market share in the tractor tyres segment, with 22% share in tractor - front

tyres and a 30% share in tractor - rear tyres. It derives 45% of the product

mix from the MHCV segment and 31% from the tractor tyres segment.

Falcon Tyres

Falcon Tyres has a 2% market share in the tyre industry, and is the

third largest player in the two & three wheeler (including motorcycle) tyres

segment. 86% of the Company’s product-mix accounts for motorcycles and

the two! three-wheeler segment.

If we view the financial performance of various tyre manufacturing

companies, most of them are operating at wafer-thin margins and any

substantial increase in costs would hurt the business adversely. Also,

reviewing the balance sheet, the ROCE and RONW are at very low levels.

The industry leader, MRF, has an ROCE of 6.7% and an RONW of 5.5%.

MRF is a little better off, with ROCE and RONW at 12.8% and 14.8%,

62

respectively. Hence, we do not find tyre stocks attractive, from an

investment perspective.

The industry is definitely set to grow, but the huge competition, huge

buyer power, pricing inflexibility and cost pressures prove as detriments.

Tyre companies are operating at very thin margins and their return ratios are

also not attractive. One can look at tyre stocks but only from a trading

perspective

On the positive side, it is estimated that there would be a Qooc o

volume growth of 12-14% in 2009-10. The performance of the tyre.

63

industry is linked to the automobile and infrastructure sectors, the growth of

which is dependent on the Performance of the economy. The current

estimated economic growth is over 8%. The continuous thrust being placed

by the Government on the development of infra-structure, particularly roads,

agriculture and manufacturing sectors, would lead to an impressive

acceleration in the automobile! tyre sector, generating more demand for

tyres.

Companies keep on developing different sizes and designs to match

the competitor’s products. However, the future is likely to be different since

companies are investing in technology. Marketing too is going to become

technology-driven.

64

EXPORTS

In 1967, MRF began to export tyres to USA - the birthplace of

tyre technology. Currently, MRF Tyres are exported to 65 countries,

including United States, South America, Africa, Middle East,

Australia and other Asian countries. In the international market,

however, MRF Ltd faces much better scenario. “About 30-40 per cent

of our sales comes from exports. The prices are much better in

international markets,” the MRF CMD said, pointing out that

international tyre prices reflected the high input costs.MRF has been

able to achieve this through its commitment and conformity to a level

of quality that has been accepted not only in India but in 75 countries

around the world. DPMC is the sole agent for MRF motorcycle and

three-wheeler tyres in Sri Lakethe Company has set up shop in Dubai

to target markets in the UAE as part of its export thrust. On the other

hand, in tonnage terms MRF has not grown much due to the

slowdown in MHCV tyre and have recorded a 0.3% growth, in the

demand for tyres.

Exports constituted 8.2% in such away that sales segment in

truck &bus is 2000,in passenger cars is 8%,in 1ev it is 3 1%.The

global tyre market currently is estimated at USD 70 billion while the

Indian market is around Rest 100 million. The global market is

dominated by Goodyear-Sumitomo with a share of 22%. On the other

hand, the domestic industry is dominated by MRF Ltd. Several

mergers and acquisitions have characterized the

65

Global market, in the recent past. This is essentially to acquire

technology, gain wider access to markets and be competitive. Indian

players are also reengineering their businesses and looking at strategic

tie-ups in this segment.

The export market for India has been predominantly to the USA

that accounts for nearly 30% of exports from the country. These are

mostly of the cross ply variety. However, of late India’s share in the

US market is being threatened by China and Japan. These two

countries are able to offer prices that are lower than that offered by

Indian manufacturers. In addition, these two nations are logistically

better placed than India when it comes to exporting to the USA.

Domestic tyre manufacturers are also facing threat from imports from

China and South Korea. The landed cost of tyres from China is lower

than the Indian price by 30%. In addition, tyres from South Korea are

imported at 30% customs duty while from other countries the duty

levied is 35%. Thus in both cases the domestic tyre manufacturers are

feeling the heat.

66

INTRODUCTION TO PROMOTIONAL ACTIVITIES

Promotion consists of those activities which are designed particularly

to help easy sale of goods or services to the favourable attention of

consumers. Sales promotion is one of the part of promotional mix which

stimulates customers & dealers for the purpose of increase in sales.

It can be defined as;

1. “An exercised information, persuation & influence”.

2. “Sales Promotion includes all the activities & tools of marketing

management which stimulates the target customers for the purpose of

increase in sales volume”.

In the above definitions, the main theme is that the sales promotion does not

include Advertisement, Personal Setting & Publicity, instead these activities

are performed purely on temporary basis or at certain times Such as;

Display, Free samples,Exhibition, etc.

67

PROMOTIONAL ACTIVITIES

Promotion consists of those activities which are designed

particularly to help the easy sale of goods .Sales promotion is one of

the part of promotional mix which stimulates customers& dealers for

the purposes of increases in sales. There are many promotional

activities undertaken by ‘MRF TYRES’ some of which are as follows;

RACING & RALLYING

MRF tyres are developed in the toughest lab known to

man.MRF is the pioneer of major racing in India. The grueling race

track has been laboratory for testing our tyres. Every MRF tyre

designed is the result of a special decisive test(that’ s sheer torture) on

the race rally tracks. Sharp turns, abrupt braking and straight stretches

of steaming asphalt. Excruciating conditions. but then only the tough

can survive, and only the toughest win. At MRF, all this is put to good

use.MRF’s lyre experts and rubber technologists are present at every

stage, and especially during those crucial moments, to study tyre

behaviour. MRF’ tyres are made to run at speeds exceeding 150

kmph, at which they are exposed to extreme conditions of heat and

traction. The molecular stability of the rubber compounds is tested

against severe gravitational stress. Our experts observe, analyse and

gather rinformation at the dirt track, which they pass on to R&D

department. This is then reviewed used to develop safer, better quality

tyres, not only for formula cars racing bikes, but also for cars that

rough it out on the tough INDIAN ROADS everyday.

68

ACHIVIEMENTS OF MRF

achievements YEAR

Special Export Award 1990-91

Top Export Award 1991-92


Top Export Award 1993 -94



CAPEXIL Awards

Certificate of Merit 1987-88



Highest Export Award 1992-93



Certificate of Merit 2007-08


J.D. Power Asia Pacific

Study Awards

Customer Satisfaction Award 2003-2004




69


CONCLUSIONCONCLUSION

70

MRF TYRES has been selected as one of the India’s TOP 10

companies for the sixth consecutive year by the far EASTERN

ECONOMIC REVIEW’S ANNUAL REVIEW.

1. The market share of MRF Tyres In Varanasi more then 25.75 % in

Four wheeler Segment(Passenger Car Radial).

2. Approximately 87% customers are satisfied with the MRF Tyres .

3. Rate of MRF Tyres are not high against with the other Company

tyres.

4. After sale service (Claim) of MRF Tyres is very good.

5. Approx 82% customer said that they MRF Tyres very easily whenever

they require them from the nearest dealer.

6. Around 75% customer said that they purchase MRF Tyres from the

Exclusive dealer of MRF Tyres Ltd.

71

SUGGESTIONSUGGESTION

72

STREANGTH

1. Established brand names (key in the replacement market)

2. Extensive distribution networks

3. Good R&D initiatives by top players

WEAKNESS

1. Cost Pressures - The profitability of the industry has high correlation

with the prices of key raw materials such as rubber and crude oil, as

they account for more than 70% of the total costs

2. Pricing Pressures — The huge raw material costs have resulted in

pressure on the realisations and hence, the players have been vouching

to increase the prices, although, due to competitive pressures, they have

not been able to pass on the entire increase to the customer

3. Highly capital intensive - It requires about Rest 4 billion to set up a

radial tyre plant with a capacity of 1.5 million tyres and around Rest

1.5-2 billion, for a cross-ply tyre plant of a 1.5 million tyre-

manufacturing capacity

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OPPORTUNITIES

Growing Economy- Growing Automobile Industry Increasing OEM

demand- Subsequent rise in replacement demand With continued emphasis

being placed by the Central Government on development of infrastructure,

particularly roads, agricultural and manufacturing sectors, the Indian

economy and the automobile sector! tyre industry are poised for an

impressive growth. Creation of road infrastructure has given, and would

increasingly give, a tremendous fillip to road transportation, in the coming

years. The Tyre industry would play an important role in this changing road

transportation dynamics

Access to global sources for raw materials at competitive prices, due to

economies of scale

Steady increase in radial Tyres for MHCV, LCV

Continuous increase in prices of natural rubber, which accounts for nearly

one third of total raw material costs

Cheaper imports of Tyres, especially from China, selling at very low prices,

have been posing a challenge. The landed price is approximately 25% lower

than that of the corresponding Indian Truck! LCV tyres. Imports from

China now constitute around 5% of market share.

With crude prices scaling upwards, added pressure on raw material prices is

expected Ban on Overloading, leading to lesser wear and tear of tyresand

74

subsequent slowdown in demand. However, this would only be a short-term

negative Cyclical nature of automobile industry .

BIBLIOGRAPHYBIBLIOGRAPHY

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MARKETING MANAGEMENT:-

By Philip Kotler

WEBSITES:-

www.mrftyres.com

www.google.com

www.weekypedia.com

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http://www.google.com/

http://www.mrftyres.com/

Documents

MRF TYRES