New Challenges, New Strategies
Tyre companies are drawing innovative business strategies to tackle new challenges owing to Covid and other external factors. Business strategies are being relooked into, from procurement of raw materials and machines to factory expansions. More than expected demand recovery in 2021 has brought some relief for tyre manufacturers. And as the fear of the third wave is fading, the tyre industry is coming into full swing to churn out more tyres, catering to both OE and aftermarket requirements. However, rising raw material costs have put a brake on their growth track as transporting raw materials and the final products through ships and roads will remain a significant task for companies. Due to production cut taken by auto companies, the OE tyre segment will see tepid growth.
In the last 18 months, the main task of tyre companies has been to keep the confidence of their employees, suppliers and dealers intact, and, to a large extent, they have succeeded! Citing zero physical contact, online communication has replaced physical meets, which has proven more effective and convenient. Covid has pushed them to adopt online tyre selling to a new level, though the offline tyre business will remain the core of the strategy. Covid has also paved more ways to implement digitisation in factories.
However, uncertainties are still hovering, and the tyre industry still sees predictability of demand and supply in the long term as a demanding task. With the recovery in demand, the industry is witnessing a series of product launches. The adaption of new mobility, especially on the EV side, is happening faster; tyre companies are ramping up their R&D and testing capabilities amid a slower demand than pre-covid time. It will be interesting to see how the new strategies will bring heyday for the tyre industry.
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