Maxxis Tyres rolls in, discovers Goa a high market for scooters
21st October 2019, 02:16 Hrs
Maxxis Tyres India, a sub-company of Maxxis Group opened its first flagship retail store in Goa last week hoping to expand its physical presence in India and enhance accessibility. In a one-to-one chat with Bing-Lin Wu, the head of the marketing division at Maxxis Tyres’ India operations, The Goan tried to find out the scenario of tyre sales in the wake of so-called global economic slow-down and why the company chose Goa to open its first retail store.
Wu, who has been associated with Maxxis for the past five years, began his journey with Maxxis India as a general manager (marketing) where he was responsible for spearheading the company’s growth in the two-wheeler segment. His vision was to create a robust dealership network across India and make Maxxis India’s most preferred OEM partner for the automobile industry. Wu who has studied business administration and management from Harbin Institute of technology and holds a bachelor’s degree in marketing from National Taiwan University points out to the many factors that were instrumental for the opening of the store in Goa.
“In Goa, apart from receiving the undented support of the local partner Sarvesh of Sini Tyre, we saw that the state is a travel destination and scooters have a high proportion of sale and usage here, especially Honda Activa. The per capita income in Goa is higher compared to other states and people here are ready to try new brands like Vespa Scooter which are on higher-end, as far as the price is considered. They don’t mind paying more, to get something more, something different. They are experimental. This is the reason why we thought of opening a retail counter here,” explains Wu, who is living in India for the past five years and is well-acquainted with the mentality of the Indian market.
Maxxis manufactures tyres for all segments – two as well as four-wheelers. However, as Wu points out, the company does not manufacture four-wheeler tyres in India as of now. “There is no make in India product as far as four-wheelers are considered, but we have a manufacturing unit in Sanand in Gujarat, where two-wheeler tyres are made since March 2018. The plant was set up in 2017 while the process began in 2015. However, as far as operations in India are considered, we are in India for the past 20 years, with our OEM partners –Suzuki, Ashok Leyland, Mahindra & Mahindra, Tata, Jeep in the four-wheeler segment and Honda in the two-wheeler segment. We are expanding our partner network and built 1900 dealer network across India,” Wu states.
Taking pride in sharing that Maxxis is among the top 10 tyre companies in the world, and while other companies have taken 100 years to reach this top position, Maxxis did this within 50 years and now stands 8th globally. The credit for rising to this level goes for maintaining quality, service and winning the trust of the customers. “We are now targeting to be top five in the world. Our relations with the customers have improved in the last two decades, in India where we had 39 warehouses, one in each state. It is expensive to have many warehouses but GST helped us to cut extra costs and now we have four warehouses, one each in Haryana, Gujarat, West Bengal and Karnataka. The operations are smoother now due to GST implementation. Across the countries, our products are the same and importing in India has become easier as we get GST credit now,” admits Wu. In the wake of the global slow down, the vehicle market is facing a sluggish trend, it is believed. But Wu explains the reasons behind this, saying that there is a new breed of vehicles in the market and consumers have developed a different mentality too. They don’t mind paying more to get something more. The prices have increased in the past five years and cost plays a role. The mileage is an important factor. The consumers are conscious of what they are buying and things like digital speedometer, bluetooth connectivity, better branding – all matters. The shift is seen from B4 vehicles to B6 vehicles which are costly as they have more features like safety, advance engine etc. while 60-70 per cent consumers buy the same vehicle, 40-50 per cent want more options and go for different vehicles. “This is the reason why Maxxis is not affected by the slowdown in the market, as it manufactures all sizes and types of tyres – nearly 30-40 kinds and is ruling on 85 per cent of the market. We are trying to capture that 15 per cent share now and we are confident of doing so as we offer the best warranty. We are the only company in India that offers five year’s unconditional warranty and free of cost replacement in the first year,” says Wu, who vouches on quality and technology.
With 1000 employees in India, 98 per cent of whom are Indians and an investment of Rs 2800 crore, Maxxis has the capacity of manufacturing 20,000 tyres per day. The production capacity grew rapidly in the first two years. India is changing fast and the policies of the government are also undergoing a sea change. The ban on single-use plastic, shift from B4 vehicles to B6 vehicles are all happening. To keep up with the changing trends is a challenging task. One major trend is that of electric vehicles. Wu mentions that their company takes care of two things while manufacturing tyres – fuel efficiency and the maximum distance of travelling or mileage. The durability of a tyre depends upon its usage and speed. If the acceleration is faster the tyres depreciate so, we have to take care of two simultaneous things, fuel efficiency, giving more mileage and speed, but not affecting the durability of the tyres. Technology would play a very important role in keeping up these challenges. “We are working on that now. We are also planning to set up five more plants in India which will also cater to the four-wheel market. We are planning to,” concludes Wu.
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