1

India is a huge country whos GDP and industrial product is growing at a quick
pace. The country is hugely connected by roads to its innermost interior parts.
Thus it becomes very important to transport industrial, agricultural, agricultural,
commercial products from one place to another.
In India there are 3 most important means of transport Air, Water, Road
& Railways.

The role of roadways played in a country like ours is

indispensable. Out of the above modes of Transport road and rail are surface
transports and of these the road is cost effective.
Out of the total surface transport 60% is done by road. The road transport
for freight is done by Trucks / L. C. Vs and passenger traffic is carried by Bus or
Car.
Thus, New Neha Tyre Remolding is a huge industry the importance of
which cannot be measured for the services it provides is indispensable.
TYRE CONSUMPTION
The Indian roads throughout is flooded with different vehicles ranging
from two wheeler to trucks
All these vehicles use tyres of different shape & sizes without which there
he will total breach down of economy. The new tyres (when worn out) have
enough strength left to take multiple retreads.

New Neha Tyre Remolding industry is a single firm

managed by Shri. Mohammed Javed Mohammed Shakkur and his
3

family. The father of Mr.Javed has no.1 in the industrial line from past
30 years. Under his guidance his son has taken training in this line
since his childhood in all respects i.e. Selling, Purchasing, Providing,
Factory Management etc. as a result of which New Neha Tyre
Remolding Industries, Nanded has came into existence since 19981999.
Mr. Javed of New Neha Tyre Remolding Industry has
personal control over all the aspects of running the unit i.e. selling,
purchasing, providing Accounts, Govt. Departmental work Banking,
Factory due to which the unit successfully performing since last 10
years. He has grassing the all.

NECESSITY OF RETREADING

As the costs are touching the sky, the transporters almost all are getting
there worn out casings retreaded. A retread costs only 1/5 the cost of new tyre,
put performs as many kilometers as a new tyre. Because of this fact, it is highly
economical and cost saving to retread worn out tyres.
India, especially south India has a long history of conserving / recycling
the worn out tyres. Initially all the tyres that are suitable for retreading are
processed through HOT system.
In this system of retreading a tyre, is cured in a mould utilizing steam
pressure..Steam gives a heating of 1500c and has moisture. Both heat and
moisture are detrimental to the casing.
Realizing the shortcoming and limitations. Hot Precured System was
introduced to Indian tyre retreading industry around 1985. Though it has the
advantage of using Precured tread, the bonding of tread to casing was carried out
using steam, which has the similar disadvantages as to Hot Capping.
The Company Vamshi Rubber Limited in collaboration with Hercules Tire &
Rubber co., U.S.A. provides the unique Cold Precured Retreading system of
recycling of tyres at low temperature and using only Electrical Energy. This
helps the retreaders to give more number of retreads per casing.

FACTOR CONTRIBUTING TO THE SUCCESS OF

5

THE COMPANY
1) Value System:The value system consists of principles and ethics of the
company. The value of company affects on choice of the
business. Mission and objectives of organization. Business
policies and practices. The company has found the fact that
extend to which the value system is shared all in the
organization is an important factor contributing to the success.

2) Mission And Objective:(Mission and objective are the main

factors of the

company which helps in guiding, directing for development,

business philosophy, business policies etc.)
To be a benchmark in the industry while manufacturing the
products

of

high

precision

ensuring

complete

customer

satisfaction.

3)Management Structure and Nature:The management structure of company is very simple in

nature. All the authorities and responsibilities are delegated to

the right person at the right place. Therefore the problem of

confusion of the work is not there. This positively affects on the
business decision.

4) Human Resource:The success of failure of an organization depends not on

machine, materiel, tools and equipment but the human resource
and the efforts that they put in the efficient performance of there
jobs.Therefore the company is giving more importance to its
employee. they are offering result orientation incentives and
homely atmosphere which motivate then to work with a high
efficiency.

5) Company Image:The image of the company matters in raising finance.

Forming joint ventures, marketing, sales contacts, launching
new products etc.This mainly contributed to the success of the
company.

6) Infrastructure:Company has a well equipped infrastructure with

7

model

and

hi-tech

machinery

installed.

Their

robust

infrastructure is the biggest asset to there organization. With a

sound infrastructure, they are capable of offering high quality
product with great efficiency to their clients.
Their infrastructure is equipped with modern
machineries enabling the manufacturing of premium quality
products at competitive rates. They ensure that their machines
are upgraded from time to time in order to increase their
efficiency and efficacy.
7) Strengths:

Premium quality products.

Skill work force.

Stat-of-art infrastructure.

Strong R&D department.

Wide distribution network.

Rich customer satisfaction.

8) Role of Entrepreneur:-

The entrepreneur of the company Mr. javed has very

perfectly played the role of entrepreneur. He has following
entrepreneurial skills...
1) Decision making ability.
2) Intense business expansion and development.
3) Welfare concept for employees.
4) Strong will power.
5) Risk bearing capacity.
6) Self confidence.

10

The Project was mainly undertaken to study the following

objectives
1. To know the demand of the product in the market.
2. To study the opinion of the customers regarding the quality
and price of product.
3. Consumer awareness about the product.
4. To know the various schemes provided by the company.
5. Persistence of the quality for a longer duration.
6. Any suggestion for improvement in the product.
7. To find out what additional facilities customers wants in
the product.
8. To find out what can be done to increase the awareness of
product in the market.

11

12

RETREADING & REPAIRING OF RADIAL TYRES

ABSTRACT
The success of Radial Tyres in this country will largely depend upon how
confident the customer is, about getting his tyres retreaded or repaired. Since the
conventional or mould cure retreading is not the answer of worn out Radial
Tyres, they could not make an impact in the market, the first time they emerged
in the late 70's. The scene today has changed quite a bit, with the advent of
Precure Retreading.
This paper briefly covers a few aspects of Radial tyre repairing,
highlighting the precautions to be taken while processing Radials.

INTRODUCTION
ldeally, a Radial tyre casing, because of a rigid crown, is MORE SUITED
for retreading, than a bias ply tyre casing, provided the Radial tyre, like all
sophisticated things is maintained well during service and retreaded with the
process that does not harm the casing.
The Conventional or mould cure retreading process is not suitable for
Radial Tyres because, even a slight mis-match between the circumference of the
mould and that of the built tyre, cause bucking of the rigid, inextensible crown,
affecting the ultimate performance of the tyre.

13

Hence the most ideal and almost the only economical process for
retreading a Radial tyre is the Precure Retreading, process, where there is
absolutely no. distortion of any kind, as all the operations are carried out in the
"road-running" conditions.
I.

RETREADING
In the Precured retreading system, processing a Radial tyre is not much
different from a bias ply tyre. Only a few precautions need to be taken in
the selection of the casing and while working on exposed steel wires.

The retreading process involves the following operations:-

a.

a.

Inspection And Selection Of Casings

b.

Buffing

c.

Rasping

d.

Cementing

e.

Filling buzzouts

f.

Building

g.

Curing

Inspection and selection of casings

This is a highly skilled operation and should be performed by a

trained and experienced person, who can judge whether the selected casing can
complete the retread life, without failure.

14

The general industry practice is to reject casings with the following

defects
i.

Tread, shoulder and sidewall separation.

ii.

Ply Gap

iii.

Belt edge separation / Belt separation

iv.

Casing damages beyond repair

v.

Exposed and rusted belts due to excessive wear

vi.

Bead failures / damages

vii.

Weather checking

b.

Buffing
The purpose of buffing is to remove the unevenness of the worn out tread

surface and to give a fresh rough surface for a perfect bond. Buffing should be
done in the inflated condition-min.

1.4 Kgs/cm or 20 psi with a radius-

controlled or template-controlled buffing machine for best results. The radius of

buffing should be selected based on the condition of the tyre and the best radius
is one which gives the "Flattest possible arc without damaging or exposing the
belts." Care should be taken to ensure that adequate rubber is left on top of the
belts for a good adhesion. The buffed surface should not be very rough. A
"Velvet like" finish helps to achieve a perfect bond between the tyre and the
bonding or cushion gum.

15

c.

Rasping
Because of the rigidity, the crown of the Radial Tyres receives quite a few

injuries which have to be dressed before building. The extent of the injuries has
to be ascertained by probing them for suitable repair operations.
Damaged steel wires on the crown should be ground or dressed with
proper grinding stones mounted on high speed pneumatic grinders and the
surrounding rubber portions need to be roughened with tungsten carbide raps.

d.

Cementing
The buffed and rasped surfaces are to be cleaned and applied with a coat

of vulcanising cement. This operation should be done without delay, to prevent

oxidation of the exposed steel wires. Tyres with injuries requiring repairs,
should not be cemented before the repair work is completed.
The cemented tyre is allowed to dry completely for 30 40 minutes. In
the meantime, the precured tread selected for the tyre, should also be cemented
on the bonding side and allowed to dry.

e.

Curing
Curing is the vital operation in which the bonding gum

f.

Building
The cemented tyre after drying is mounted on a builder and inflated to at

least 1.4 Kgs/cm 20 psi. A layer of bonding or cushion gum is applied to the
bonding surface and stitched.

The prepared tread is then placed over the

16

bonding layer, and the ends are joined as per procedure. The tread is then
stitched well on to the casing, in a way to expel any air trapped under it.
The built tyre is fitted with a flexible rubber envelope, to hold down the
tread in position, as the bonding takes place.

The enveloped tyre is then

mounted on a curing rim with tube and flap and loaded into a steam or
electrically operated hot air chamber.
Both the tyre and the chamber are pressurised the tyre with the air at a
pressure higher than that of the chamber and the chamber with steam or hot air,
as the case may be.
In the case of Radials there is a more advantageous, rimless, bagless
system, where the curing is carried out without inflating the tyre. There is a
considerable saving in terms of time, energy and curing bags.
Radial Tyres thus retreaded with Precured treads, give equal and
sometimes even more mileage than the original tyre itself.

What is more,

retreaded tyres do not face the service problems that are faced by the retreaded
bias ply tyres, which explain why retreaders like to retread a Radial tyre more
than a conventional tyre.

17

FUNDAMENTALS OF TYRE REPAIRS

The fundamentals of tyre are universally followed and generally accepted.
However, the technique of tyre repair will vary with each tyre repair specialist
and reflect his experience and knowledge.
The basic fundamentals are ANALYSIS
Each injury must be probed and analyzed prior to any physical activity.
(the size of injury, tyre construction, location of the injury, age of tyre and usage,
must be taken into consideration)

CUT-DOWN
Once the analysis has been completed, the technician will proceed to cut-away
the damaged portion of the injury in order to obtain a better idea of its size.
(Quite often, a small injury can evolve into a much larger injury as cut-down
procedures reveal hidden damage within the tyre body structure)

INJURY PREPARATION
After the injury has been exposed and all damaged cord material removed, a
determination must be made than the injury size and location is within
limitations. Injury preparation involves both the exterior and interior portions of
the tyre. Texturizing rubber, cleaning cord material (steel / fabric), inner liner
preparation etc., all come under the heading of injury preparation.

18

INJURY CAVITY MATERIAL

Depending on the type of material to be used to fill the injury cacity, a
compatible cement will be applied to the prepared surface. Black Vulcanising
Cement will be used with uncured rubber fill material.

REPAIR UNIT SELECTION

Repair material manufacturers publish charts and specifications for different for
different types of tyre & repair Unit selection, based on injury size and location.
Location of the injury (crown, shoulder, sidewall), ply rating of the tyre, type of
repair material, type of curing system, spotter, chamber or bonder are also major
factors in determining which tyre repair unit is applicable.

REPAIR UNIT INSTALLATION

Once the injury has been filled with the proper material, the internal tyre cavity
must be adequately cleaned (buffed and vacuumed), cement applied and dried,
then the repair unit can be installed. The appropriate repair unit must be properly
installed over the injury and aligned directionally within the tyre Depending on
the procedure and system used, the repair unit will be cured either chemically or
by heat, pressure and time to provide strength and flexibility to the injury.

FINAL INSPECTION
Prior to returning the repaired tyre to the user, check all repairs for good
adhesion and proper orientation in the tyre.

19

Also, a Blue Triangle lable may be affixed on radial truck tyre sidewall injuries,
to differentiate a repair Bulge from a tyre separation, Acceptable bulge is 3/8"
(10mm)
If the repair was in the tread area, grooving out the filled material to approximate
the original tread design in necessary for traction as well as plug flexibility.

TYPES OF REPAIR MATERIALS

Repair materials currently available
Bonding gum for fill material
Cements Chemical, Black Vulcanising

TYPES OF REPAIR UNITS

Bias ply repair unit
Radial ply repair unit

20

21

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 all 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 implictions 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.
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 & its effective
utilization for the achievement of the common goals of the oranisation.
22

WORKING CAPITAL
Provision for 1 month raw materials and consumables have been made in
order to maintain interrupted production. Although, the products, a stock
finished good, half month and work in process half month, and provision for one
month outstanding debtors have been also made from the study of detailed
working capacity statement. It will be observed that no credit has are purchased
on sash payment basis.
Working capital loan will bear 16 -1/2% per annum.
Raw materials including all chemicals
Rs.
Total/Year

100 Capacity/Shift

3 Months

-- do ---

84,000,000.00
21,000,000.00

25% Margin Money

PRODUCTION COST
I

Fixed Expenditure

Rs.

Total Project Cost

50,21,950.00

25% Personal Resources

12,55,487.50

Total Loan

37,66,462.50

1.

Monthly Instalment

44,838.00

2.

Monthly Intetest to be paid

45,511.42
90,349.42
24,750.00
23

II

Labour Cost

III

Miscellaneous Expenditure
a. In running this project other
indirect expenditure has to be
incurred and therefore those were
estimated as per month basis.

1.

Power minimum including lighting

3,500.00

2.

Maintenance and Repair

4,500.00

3.

Stationary Ppstage

3,500.00

4.

Travelling & Conveyence (Sales)

22,000.00

5.

Miscellaneous etc. uding lighting

3,500.00
36,500.00

Total Fixed Expenditure/Month

1,51,999.50

REQUIREMENT OF ELECTRICITY
[POWER & LIGHTING]
The power equipment for running the precured retreading factory is. 440 volts, 3
phase, 50 cycles.
The details of `Horse power requirement' for each machine is given below
Buffer-cum-builder

.........

Air Compressor

.........

Water pumpset Motor

.........

Lighting
Other tools

Total

5.0 Hp.
3.0 Hp.

.........
.........

8.5 Hp.

1.0 Hp.
2.5 Hp.
20.0 Hp.

24

The approximate requirement of power in terms of KWH in about 1.5

units per tyre. So for a single sift of eight hours, to retread 8 teuch tyres and 8
LCV tyres we need 24 units of electricity [24 KWH]; for 3 shifts about 72 units
of electricity is required.
For 25 working days in a month the electricity consumption and charges
are given below
Rs.
1)

24 X 25

600 units for

1 shift . . . . . .

2)

48 X 25

1,200 units for

2 shifts . . . . . .

3)

72 X 25

690.00
1380.00

1,800 units for

3 shifts . . . . . .

2070.00

The prevailing rate of tariff for power is Rs. per unit [ in Maharashtra ]
The power is supplied an commercial basis.
It is suggested that a 25 KVA capacity generator be installed in the factory
as a stand by need `Power failure'.

25

WATER AND STEAM REQUIREMENT

About 300 ltrs. of water per day is required for the production fo steam. A
boiler capable of producing 200 kgs. of steam per hour is sufficient for the
bonder. Coal, fire or wood can be used as fuel for this boiler. Diesel [LSD] can
also be used as fuel, if suitable burner is fixed. The condensate water from the
steam trap fitted to the Bonder can be collected in a tank and pumped back to the
boiler. This will ensure economy of water and fuel.
Statement showing cost of production of steam
The break up on the cost of production of steam in the 4 stage cross tube
[Nor IBR] Boiler is as follows :1

shift

shift

shift

(8 hrs.)

(16 hrs.)

(24 hrs.)

Rs.
Cost of water per month 450

Rs.

Rs.

900

1350

1 shift

2 shifts

3shifts

8 truck tyre

16 truck

24 truck

8 LCV tyres

16 LCV

24 LCV.

Rs.

Rs.

Steam required for one tyre 45 hg ltr.

Rs.
Cost of fire wood
at Rs. 13 per tyre

208

416

624

4920

9840

14760

Cost of fire wood

per month of 25 days

26

Cost of water per month

450
5578

900
1350
11156 16734

WORKING CAPITAL REQUIREMENT

The `Working Capital' required for the running of the Retreading plant is
calculated on the basis of production of tyres shiftwise per month
Description

1 shifts
Rs.

2 shifts
Rs.

3 shifts
Rs.

260000

520000

780000

163658

327316

490974

690

1380

2070

2696

5392

8088

200

400

600

13000

26000

39000

Total Retreading Receipt

per month (25 days)
A: VARIABLE COSTS :i)

Raw materials

ii)

Electricity

iii)

Steam

iv)

Repairs & maintenance

v)

Commission at 5%

vi)

Interest on working
capital @ 18%

25534.44 47261.88 70150.32

205778.44 407749.88 610882.32

B:- DIRECT WAGES :i)

Vehicle maintenance

2000

3000

4000

ii)

Consumable Stous

1500

3000

4500

iii)

General overheads

1000
4500

1500
7500

2000
10500
27

C :- FIXED COST
i)

Rent

ii)

Insurance (1% capital)

iii)

Salaries & Wages

4000

4000

4000

416

416

416

6100
10516

9000
13416

10500
14916

5673.68

5673.68

5673.68

D :- REPAYMENT COST
i)

Repayment per month

on principal

ii)

Repayment on interest

6354.50
6354.50
6354.50
12028.18 12028.18 12028.18

Total Production Cost

(A+B+C+D)
232822.62

440694.06 648326.18

PROFIT
PROFITABILITY BEFORE TAX:Income from Retreading (sales)
Sales of Waste
TOTAL SALES

260000

520000

780000

1500
261500

3000
523000

4500
784500

Less :Cost of production

Gross Realisation per month

232822.62 440694.06 648326.18

28677.38

82305.94 136173.52

Break Even Point :28

B.
C.
D.

Direct Wage
Fixed Cost
Repayment Cost

4500
7500
10500
10516
13416
14916
12028.18 12028.18 12028.18
27044.18 32944.18 37444.18
Total fixed expenditure

Break Even Point =

X 100
Total sale variable cost
27044.18 x 100

=
261500 20578844
=
I]

48.53 %

Total production capacity taken for single shift without machinery

depreciation = 48.53 %
II]

Total production capacity for double shift = 28.58 %.

29

30

RECREUITMENT
It is regarded as the most important function of human resource because
unless are right type of people are hired even the best plants, organizations
charts and control system would not do much good.
Once the human resource requirement have been determined recruitment
connects next step in the human resource planning,recruitment makes possible to
acquire the number and type of people necessary to ensure continious operation
of the organization.

Definition
Recruitment is the process of searching for prospective

employees and

stimulate them to apply for a job in an organization.

Recruitment is the process of discovering potential applicant for actual or
anticipated organizational, vaccines.
In short recruitment is linking activity bringing together with job and
those looking for jobs.
There are two type of recruitment source
Internal source
External source

31

INTERNAL SOURCES
Internal source means to select the candidates from the payable or regular
of company means the employee works presently or in past the worked in the
organization this can be done through device like promotion demotion and
transfer.

EXTERNAL SOURCES
External source means to select the candidates from the outside from
giving advertising in news paper, magazine etc. and new entrance of labour or
experience employee. By this source can selected best one because the field of
selection is wide.

32

TRAINING
Training is one of the most important activity of management. Training is
very essential technique for improving productivity and provide desire
knowledge to the labour & employee.Training attempts are made to become an
employee fully aware about the environment and technique motivation. The
main object of training is to decrease the productivity with appropriate training
labour and worker can work effectively and efficiently.

TRAINING METHOD
Management training method consists of on the job method and off the
job method.
ON THE JOB METHOD

OFF THE JOB METHOD

Coaching

1.

Lectures

Job rotation

2.

Conference

Under study
Multiple managements

3.
4.

Case study
Role playing

33

SELECTION
After identifying the source of human resource, searching for prospective
employee and stimulating them to apply for jobs in an organisation, the
management has to perform the function of selecting the right employees at the
right time. The obvious guiding policy in selection is the intention to choose the
best qualified and suitable job candidate for each unfilled job the objective of
the selection decision is to chose the individual who can most successfully
perform the job from pool of qualified candidates.
The selection procedure is the system of function and device adopted in
given companies to ascertain whether the candidates specifications and
requirement or not. The selection procedure cannot be effective until and unless :
{1}

Requirements of the job to be filled have been clearly specified.

{2}
{3}

Employee specification have been clearly specified.

Candidates for screening have been attracted.

TRADE UNIONS
{1}

Improratance of building relationships with employee

representatives

{2}

Role of Trade Unions has changed.

{3}

Importance of consultation and negotiation and working with

trade

unions.
{4} Contributes to smooth change management and leadership.

34

REWARDS SYSTEM
{1}

The system of pay and benefits used by the firm to reward

workers

{2}

Money not the only mehtod

{3}

Fringe benefits

{4}
{5}

Flexibility at work
Holidays, etc.

EMPLOYMENT LEGISLATION
{1}

Increasingly important of the Human Resource Management role.

{2}

Wide range of areas for attention.

{3}

Add to the cost of the business.

DEVELOPMENT
Development means develop a particular person, make major changes in
his over all personality. Development refers to a long term process consisting
education base development is systeematic process other than training for
manageerial personal development is systematic and organized procedure by
which managerial personal learn conceptual and there critical knowledge
development is indirectly connected with philosophical educational concepts.

35

DEFINITION:
Development is a systematic plan and continious process of learning,
growth and development by which the manager develop their abilities and
skilled to manage.

36

37

INTRODUCTION TO MARKETING MANAGEMENT

Marketing Management is a compound word which means to manage the
entire system of marketing.
The process of ascertaining consumers 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.
Todays market it customer 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 customers
buying behaviour. All commodity markets are heterogeneous, some commodity
are never in conformiy 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.

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
38

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 grwoth
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
payers (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 (OEMs)
and exports. Tier-II 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.

Market share in the commerical vehicles tyre catregory and is around 20% in the
two wheeler tyre category.
The Indian tyre 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,

39

in tonnage terms, grew at a healthy rate of 8.7% in 2005-06 against that of 200405. The medium and heavy commercial vehicle (MHCV) tyre segment
registered a growth of 7.7% while the light commercial vehicle (LCV) and
passenger car tyre segments registered a phenomenal growth of 14.7%
respectively.
A few years back the auto industry was sluggish and so also was the tyre
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 tyre industry. However,
although the tyre 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
2005-2006. Hence, the growth in sales volumnes has not really added to the
bottom line.

SWOT ANALYSIS
SWOT Analysis is nothing but an intellgent way to analyse the product
in both positive & negative manner.As S stands for streangth which shows
value of product in the market W stands for weakness due to which we can
about what improvements are to be made further ; O stands for opportunities
which remembers us what we have losen in past so that in future it should not
happen again & last is T that stands for threats which helps us in knowing
things that are dangerous for the product & companys profit.

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So now lets see the SWOT analysis of TYRES-MRF TYRES

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

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
1

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 infrastrucure, particularly
roads, agricultural and manufacturing sectors, the Indian
economy and the automobile sector / tyre indsutry 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

THREATS

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1. Continuous increase in prices of natural rubber, which accounts

a. for nearly one third of total raw material costs.
2. Cheaper imports of Tyres, especially from China, selling at very
a. low prices, have been posing a challenge. The landed price is
b. approximately25% lower than that of the corresponding Indian
c. Truck / LCV tyres. Imports from China now constitute around
5% of market share.
3. With crude prices scaling upwards, added pressure on raw material prices
is expected.
4.

Ban on Overloading, leading to lesser wear and tear of tyres and

subsequent slowdown in demand. However, this would only be a shortterm negative.

5. Cyclical nature of automobile industry.

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2002

2003

2004

2005

2006

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SALES 2,188.62

2,580.03

3,746.69 1,836.38

2,975.74

1. There was a large increase in the sale in 2006 as compared to the year
2005.

2002

2003

2004

1,815.32

3,040.00

2005

2006

TOTAL
INCOME 2,309.81

3,772.55

2,575.34

2. As the sales increase in 2005 the total income also increased

simultaneously.

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1. To implement multi-skill index for employees & to conduct assessment

development centers.
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2. Value Engineering :To adopt new technologies those are introduced in the
recent era of manufacturing.
3. Value Analysis : The price of products should be similar or less as
compare to the competitors product & should increase profit margin.
4. Benchmarking is done as per National market it should be done global
market.
5. To implement 360 degree appraisal for all the levels.
6. To have marketing or customer care units on regional level in spite of
having at state level.

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1. Industrial Management - By O.P. Khanna

48

2. Human Resource Management - By Anjali Ghanekar

3. Production and Opration Management - By Khanna
4. Marketing - By Philip Kotler

49