You have to wait until Diwali to see the collection on demand: Ceat MD

CHENNAI: With the automotive sector witnessing a sharp contraction in demand, companies are reducing production to clean inventory. Ceat tires , part of RPG Group expects the demand selection to begin in the second half of the current year. In conversation with TOI, managing director (MD) of Ceat Anant Goenka talk about market terms, business performance plans and commercial expansion. Excerpts

How is the market ?

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El market es actualmente un desafío. En realidad, las iniciativas positivas realizadas por el gobierno como curar la contaminación, aumentando las normas de seguridad. Pero lo que sucede como resultado es que los precios de los vehículos están subiendo donde la demanda de vehículos está experimentando una caída. Ese es el gran desafío. Tomará al menos 8-9 meses para ver cualquier aumento en la demanda. Sin embargo, tenemos que esperar hasta la temporada festiva, Diwali 2020, para ver un repunte de la demanda, ya que la temporada festiva anterior fue débil.

What is the share of tire production for the replacement segment?

The participation in the production of tires for the replacement segment reaches 60%, while our participation in the original equipment (OE) is 30%.

What is the export objective of this plant?

Have a sales target to export market about 15% of our revenue for this Chennai plant, which is similar to the business ’s overall ratio of 13-15%.

How does Q4 performance of the business look?

The performance for the fourth quarter seems positive year by year. However, last year's business was difficult with the entire IL&FS situation.

How do you see the decrease in raw material prices to help the results?

We have 40-50% of the cost of the raw material for crude oil and its derivatives. Then, with the fall in commodity prices due to the crown virus crisis, our margins should be intact and growth should also be better. Rubber prices are stable since January and now some corrections have been seen.