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Old 22nd August 2018, 22:52   #1
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Default Why do CEAT Tyres lag behind market leaders like MRF & JK?

Hi Guys,

I'm a student and doing a project on CEAT tyres (for passenger cars in specific).

I was seeing some reports and found that CEAT lags behinds MRF big time, and despite them being in comparable category (price wise), yet MRF is miles ahead in terms of sales volume.

Can you guys share your own inputs, as to why in your opinion CEAT is lagging behind MRF, and losing the market share in general? Reasons can be MRF's strong marketing, customer service in MRF's own centers, product quality, or anything you think which might be holding CEAT back?
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Old 23rd August 2018, 01:50   #2
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Hi, having worked in tyre industry for some time I can throw a few pointers.

Ceat being owned by RPG had never shown the intent to really change as per times. Once a very big brand it's now reduced to 4/5th in many segments they caters to. They lagged in many aspects - radialisation, tubeless tyres, systemising their operations, proper commercial policy etc etc, they just mimicked the industry but never behaved like leaders. They didn't invest enough to upgrade their products as well. In the tyre industry it's a well known fact that Ceat was the only company that could have challenged MRF simply because they were making tyres for all - 2 & 3 wheleers, tractors etc with a good brand recall. Not many companies had that privilege.

However coming to car tyres specifically Ceat never was aggressive in capturing the OE fitment in the initial days. For instance Apollo which is now a leading player in car radials (probably at par or better than MRF) had shown tremendous business sense and were extremely aggressive in their OE fitment strategy. This forced dealers to stock their tyres and later a steady stream of newer & better products made them a strong contender. A decade ago (and probably even now) customers stuck to the OE fitment if they were satisfied with their performance. Ceat failed in this aspect when compared to MRF.

With hindsight it's easier to say that MRF had a better brand but when radialisation started in India both companies had the same chance to work on their products lines and Ceat didn't upgrade. It was JK which introduced the first PCR in India. When I was working in the industry a decade ago MRF was never a big brand in PCR segment. Only their huge network and competent policies forced dealers to stock and sell. Bridgestone, Goodyear, Michelin were the first choices for the informed buyers.

Another aspect which Ceat missed and MRF latched on was the fact that alignment centres quickly became Tyre dealers and MRF supported this channel with proper policies and training. They were the first to appoint T&S (tyres and service) and forced many dealers to invest in such a setup. I remember that they used to insist atleast for a tyre changer in remote areas. Else the dealer didn't get supplies.

Lastly I think visibility sells more than anything else and MRF definitely is a much bigger and better brand now. MRF dealers make more money that Ceat dealers so that helps too in building your brand.

Hope this helps, cheers
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Old 23rd August 2018, 07:19   #3
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Default re: Why does CEAT Tyres lag behind market leaders like MRF & JK?

CEAT sold their radial tyre production facility in Aurangabad to Goodyear in the early 2000s. This was just when the entire industry was investing in more radial tyre production facilities.

This was a big setback and definitely pushed CEAT back by many years.

They have been rejuvenated now. They have some very nice policies and brilliant, dynamic people at the top. They have been expanding rapidly in the Indian market over the past year or so and seem to be doing well.

Unfortunately, in the time that they were pretty much out of the market, other companies have filled the gap and it will be very difficult for CEAT To overtake any of them. At most, they can make a dent in some companies' share.

They have a new modernisation plan for all their branded outlets called Ceat Shoppes. They want to up the standards that people expect from a branded outlet. They plan to have about a 100 new outlets this year and maybe 500 over the next 4-5 years.
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Old 23rd August 2018, 08:30   #4
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Default re: Why does CEAT Tyres lag behind market leaders like MRF & JK?

Has anybody noticed that CEAT has quietly dropped their 'Born Tough' tagline in ads? Perhaps they realized rock hard tyres are not that desirable anymore in passenger cars segment because of much better road conditions than in 80s or 90s.
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Old 23rd August 2018, 09:30   #5
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Default re: Why does CEAT Tyres lag behind market leaders like MRF & JK?

As the matter of OE fitment goes, the JK tyres I once had on a fiat palio had horrible road noise from day one and had an alarming rate of tyre wear despite all alignment and balancing parameters being met, better not to mention its grip levels and comfort. Thereafter never had a second look at JK for any of my tyre purchases.

The 'once bitten' effect matters a lot despite being OE or not. Just look at the Yokohamas and the Continentals doing decent numbers. Don't think they have OE status or dedicated stores.
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Old 23rd August 2018, 09:58   #6
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Default re: Why does CEAT Tyres lag behind market leaders like MRF & JK?

Quote:
Originally Posted by crdi View Post

Just look at the Yokohamas and the Continentals doing decent numbers. Don't think they have OE status or dedicated stores.
Yokohama does have dedicated stores now known as a YCN (Yokohama club network).

https://www.yokohama-india.com/news/...n-maharashtra/

It's for the tyre dealers who have the potential and space. Entire branding is done by Yokohama but at the same time the dealer is free to stock other brands as well.

Ceat is doing well in my city. Their tyres are priced very low (especially SUV, Mpv and sedan) compared to other well known brands and people on budget automatically opt for Ceat as it's a known brand and costs less to buy.
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Old 23rd August 2018, 10:08   #7
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Default re: Why do CEAT Tyres lag behind market leaders like MRF & JK?

Boy, they sure suck in OEM supplies too. Of all the Official Reviews we have done in a decade now, the single car to come with CEAT tyres was the TUV300. Mostly, we see Bridgestone, Apollo & Goodyear:
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Old 23rd August 2018, 11:12   #8
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Default re: Why do CEAT Tyres lag behind market leaders like MRF & JK?

When I wanted to buy 5 new tyres of 205/60 R16 for my car, I simply could not notice the word Ceat in the crowd of Apollo, JK, Goodyear, Michelin etc.

Even if I remembered CEAT, the reaction in my mind would have been: "That is the tyre for kalee-peeli jeeps, six seaters, tempo trax and tractors."

And I did not hear CEAT for any speciality (any specific USP) like:
Long life I got from stock JK of my car
Silent running claimed from Michelin
Low initial cost or low cost per km (both I get from my current tyres, Ultramile).

So IMO, it is low brand visibility, poor brand perception and lack of USP.

Last edited by Rahul Bhalgat : 23rd August 2018 at 11:13.
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Old 23rd August 2018, 11:27   #9
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Default re: Why do CEAT Tyres lag behind market leaders like MRF & JK?

Three words for you- Sachin Ramesh Tendulkar
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Old 23rd August 2018, 11:35   #10
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Default re: Why do CEAT Tyres lag behind market leaders like MRF & JK?

Quote:
Originally Posted by Vitalstatistiks View Post
Three words for you- Sachin Ramesh Tendulkar
True. He played a huge role in MRF being visible.

However, dont rule out the fact that MRF tyres are excellent for Indian conditions. We enthusiasts used to look down upon them for many years, but the mass market LOVED it. Of course, with the ZLO, the Z Sport and now the Perfinza, MRF is moving upmarket.

Another thing many people ignore is the influence dealers have in the market. MRF's policies have been very clear and the company is very professionally run. In my opinion the best run Indian tyre company (Apollo is getting there now ) and they are not run as per the whims and fancies of a few powerful people.

While MRF has been a family owned company (yes, it's listed and all, but the family does wield total power), they have allowed professionals to run it professionally.

Having worked with MRF closely, I have great respect for them. They are hard people to work with, but if you are able to understand why they behave the way they behave, life becomes a lot easier.

A small example: As a tyre dealer, we get cases on a daily basis of damaged tyres(sidewall cuts, bulges, etc etc). We submit the cases to the tyre company. Sometimes the company obliges and gives a discount to the consumer on a goodwill basis. We then install a new tyre on the consumer's car and it's done. However, we are compensated the discounted amount by the company by way of credit notes sometimes.

There are schemes occasionally and again, we are compensated through credit notes.

With MRF, there is NO reason to ever check. The credit notes just come automatically. With most other companies, we have to keep an eagle out and ensure we get what we are owed. Not with MRF.

These are just some of the reasons MRF is ruling and other companies find it hard to dislodge them from their perch.
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Old 23rd August 2018, 12:55   #11
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Default re: Why do CEAT Tyres lag behind market leaders like MRF & JK?

Quote:
Originally Posted by Abh1nav View Post
Hi Guys,

I'm a student and doing a project on CEAT tyres (for passenger cars in specific).

I was seeing some reports and found that CEAT lags behinds MRF big time, and despite them being in comparable category (price wise), yet MRF is miles ahead in terms of sales volume.

Can you guys share your own inputs, as to why in your opinion CEAT is lagging behind MRF, and losing the market share in general? Reasons can be MRF's strong marketing, customer service in MRF's own centers, product quality, or anything you think which might be holding CEAT back?
Recently, I had seen an advertisement for CEAT tyres that said that it could run for 1 Lakh Kilometers!! Now. that seems like an extremely hard tyre compound. What amount of safety would such a hard tyre have?

It is also possible that they did not invest in making themselves more "visible" to the replacement market.
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Old 23rd August 2018, 15:13   #12
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Default re: Why do CEAT Tyres lag behind market leaders like MRF & JK?

Quote:
Originally Posted by swissknife View Post
Recently, I had seen an advertisement for CEAT tyres that said that it could run for 1 Lakh Kilometers!! Now. that seems like an extremely hard tyre compound. What amount of safety would such a hard tyre have?

It is also possible that they did not invest in making themselves more "visible" to the replacement market.
I also wanted to understand this after watching the ad on TV. Tyre running for 1 Lack KM is too far fetched when we always talk about replacing tyres at 40K KMs on an average (so 2.5 half times more life).
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Old 23rd August 2018, 17:08   #13
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Default re: Why do CEAT Tyres lag behind market leaders like MRF & JK?

I would say that they might be picking up steam atleast in the 2 wheeler segment considering the launch of the zoom rad x1 tyre. My friend has it installed on his Duke 200 and has a lot of nice things to say about it.

One reason I can come up with which others haven't already highlighted, is that MRF and JK are also strong players in the motorsport scene which could provide additional marketing and r&d advantages to them.
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Old 23rd August 2018, 17:42   #14
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Default re: Why do CEAT Tyres lag behind market leaders like MRF & JK?

Quote:
Originally Posted by GTO View Post
Boy, they sure suck in OEM supplies too. Of all the Official Reviews we have done in a decade now, the single car to come with CEAT tyres was the TUV300.
My Kwid did come with CEAT tyres as OEM
Why do CEAT Tyres lag behind market leaders like MRF & JK?-img_20180823_173746.jpg
Team BHP official review car, Kwid 1.0L had CEAT tyres too.

Last edited by Dr.Naren : 23rd August 2018 at 17:55.
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Old 23rd August 2018, 17:57   #15
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Default re: Why do CEAT Tyres lag behind market leaders like MRF & JK?

Quote:
Originally Posted by sgautam View Post
Hi, having worked in tyre industry for some time I can throw a few pointers.

Ceat being owned by RPG had never shown the intent to really change as per times. Once a very big brand it's now reduced to 4/5th in many segments they caters to. They lagged in many aspects - radialisation, tubeless tyres, systemising their operations, proper commercial policy etc etc, they just mimicked the industry but never behaved like leaders. They didn't invest enough to upgrade their products as well. In the tyre industry it's a well known fact that Ceat was the only company that could have challenged MRF simply because they were making tyres for all - 2 & 3 wheleers, tractors etc with a good brand recall. Not many companies had that privilege.

However coming to car tyres specifically Ceat never was aggressive in capturing the OE fitment in the initial days. For instance Apollo which is now a leading player in car radials (probably at par or better than MRF) had shown tremendous business sense and were extremely aggressive in their OE fitment strategy. This forced dealers to stock their tyres and later a steady stream of newer & better products made them a strong contender. A decade ago (and probably even now) customers stuck to the OE fitment if they were satisfied with their performance. Ceat failed in this aspect when compared to MRF.

With hindsight it's easier to say that MRF had a better brand but when radialisation started in India both companies had the same chance to work on their products lines and Ceat didn't upgrade. It was JK which introduced the first PCR in India. When I was working in the industry a decade ago MRF was never a big brand in PCR segment. Only their huge network and competent policies forced dealers to stock and sell. Bridgestone, Goodyear, Michelin were the first choices for the informed buyers.

Another aspect which Ceat missed and MRF latched on was the fact that alignment centres quickly became Tyre dealers and MRF supported this channel with proper policies and training. They were the first to appoint T&S (tyres and service) and forced many dealers to invest in such a setup. I remember that they used to insist atleast for a tyre changer in remote areas. Else the dealer didn't get supplies.

Lastly I think visibility sells more than anything else and MRF definitely is a much bigger and better brand now. MRF dealers make more money that Ceat dealers so that helps too in building your brand.

Hope this helps, cheers
Thanks for the detailed response! gave me a lot of great insights I can work on!

Quote:
Originally Posted by Nikhilb2008 View Post
CEAT sold their radial tyre production facility in Aurangabad to Goodyear in the early 2000s. This was just when the entire industry was investing in more radial tyre production facilities.

This was a big setback and definitely pushed CEAT back by many years.

They have been rejuvenated now. They have some very nice policies and brilliant, dynamic people at the top. They have been expanding rapidly in the Indian market over the past year or so and seem to be doing well.

Unfortunately, in the time that they were pretty much out of the market, other companies have filled the gap and it will be very difficult for CEAT To overtake any of them. At most, they can make a dent in some companies' share.

They have a new modernisation plan for all their branded outlets called Ceat Shoppes. They want to up the standards that people expect from a branded outlet. They plan to have about a 100 new outlets this year and maybe 500 over the next 4-5 years.
Studying about CEAT shoppes as well. The sad part there is that while they were initially set up to stock only CEAT tyres, they are now stocking other brands as well and that's eating into CEAT's share even in those stores.

Quote:
Originally Posted by GTO View Post
Boy, they sure suck in OEM supplies too. Of all the Official Reviews we have done in a decade now, the single car to come with CEAT tyres was the TUV300. Mostly, we see Bridgestone, Apollo & Goodyear:
Yes, just confirmed this from a source at TATA. None of the Tata cars use CEAT. They use Good year, Apollo, MRF and Bridgestone!

Quote:
Originally Posted by Nikhilb2008 View Post
True. He played a huge role in MRF being visible.

However, dont rule out the fact that MRF tyres are excellent for Indian conditions. We enthusiasts used to look down upon them for many years, but the mass market LOVED it. Of course, with the ZLO, the Z Sport and now the Perfinza, MRF is moving upmarket.

Another thing many people ignore is the influence dealers have in the market. MRF's policies have been very clear and the company is very professionally run. In my opinion the best run Indian tyre company (Apollo is getting there now ) and they are not run as per the whims and fancies of a few powerful people.

While MRF has been a family owned company (yes, it's listed and all, but the family does wield total power), they have allowed professionals to run it professionally.

Having worked with MRF closely, I have great respect for them. They are hard people to work with, but if you are able to understand why they behave the way they behave, life becomes a lot easier.

A small example: As a tyre dealer, we get cases on a daily basis of damaged tyres(sidewall cuts, bulges, etc etc). We submit the cases to the tyre company. Sometimes the company obliges and gives a discount to the consumer on a goodwill basis. We then install a new tyre on the consumer's car and it's done. However, we are compensated the discounted amount by the company by way of credit notes sometimes.

There are schemes occasionally and again, we are compensated through credit notes.

With MRF, there is NO reason to ever check. The credit notes just come automatically. With most other companies, we have to keep an eagle out and ensure we get what we are owed. Not with MRF.

These are just some of the reasons MRF is ruling and other companies find it hard to dislodge them from their perch.
I've spoken to some people who say similar stuff on the customer service end as well. CEAT is still leaves a bad impression, while MRF is on a different level as far as their exclusive stores are concerned.

Quote:
Originally Posted by swissknife View Post
Recently, I had seen an advertisement for CEAT tyres that said that it could run for 1 Lakh Kilometers!! Now. that seems like an extremely hard tyre compound. What amount of safety would such a hard tyre have?

It is also possible that they did not invest in making themselves more "visible" to the replacement market.
That's what they're trying to focus on now, the replacement market. But tackling strong competitors like MRF, Apollo is proving to be quite tough for them I guess.

Quote:
Originally Posted by IshaanIan View Post
I would say that they might be picking up steam atleast in the 2 wheeler segment considering the launch of the zoom rad x1 tyre. My friend has it installed on his Duke 200 and has a lot of nice things to say about it.

One reason I can come up with which others haven't already highlighted, is that MRF and JK are also strong players in the motorsport scene which could provide additional marketing and r&d advantages to them.
On the contrary, I hear that RE Himalyan owners are not at all happy with the CEAT tyres that come as standard with the bike. Lots of complaints and unresolved issues!
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