Sales and Distribution Essay Example for Free

Sales and Distribution Es enjoinCompany Snapshot CEAT Limited RPG tyre manufacture Automobiles Born tough Take it on Products are know for durability and superior fictitious character Parent Company Category Sector Tagline/ Slogan USP Manufacturing units 4 Location of manufacturing units 3 in India- B fleetup, Halol, Nashik and 1 in Srilanka organic capacity 940,000 Tyres per month Distribution Coverage 186 Districts Clearing and Forward Agents 112 Dealership over 3500 Company owned showrooms 70(in 2012 to be change magnituded to 200 by 2013) wide-cut sales(in Rupees) INR 4492. 03 Crores (in 2012) Increase in sales y-o-y 27.35% (2011 to 2012) Business Markets segmentation (B2B, B2C, B2G) B2B B2G B2C Heavy-duty Trucks and Buses Cars Light Commercial Vehicles SUVs Earthmovers Forklifts Tractors Trailers Motorcycles and Scooters Auto-rickshaws IBS Hyderabad Page 3 Quotes to Quote Quality for us is more than state-of-the-art, we would say its state-of-the-mind. When you think right, you always deliver right. -CEAT. in Website For the man who counts signals to reach home safely. For the woman who drops her child to school. For the vendor who has to reach the market in time.For the young passenger who wants to race the wind we make quality our responsibility. And we take our responsibility seriously. -CEAT. in Website We believe that our brand must help our consumers in doing their businesses better or support them in leading a better, safer life. -Vinod Kumar, GM, Marketing, CEAT Ltd We dont believe in flashing numbers, we let quality do our talking. And it is with reason that CEAT marks the highest exports from India in truck, OTR and LCV categories. -CEAT, Network, Citation date- 16th Jan 2013, http//www. ceat.in/newsite/universal/network. asp IBS Hyderabad Page 4 II. Economies and Industry Overview i. Economy- Overview The recent financial year (2011-12) was challenged much by the critical waves from different geographies and has hit the world bu sinesses at a large scale. The Europe sovereign debt crisis and its skepticism on its potential to become a global meltdown pushed the investor confidence again after the 2008 crisis. Inspite of the government? s reforms and third party? s (UNO, World Bank, etc) assistance the economies are still fragile and recovering at a much slower phase.With US and other developed nations recover slow, developing nations has become the sweet spot for many. India sustained its growth estimates very close to that of the RBI estimates to 6. 9% in 2011-12 (CSO estimates). Still India has mounting challenges in infrastructure, inflation, fluctuations in the value of rupee, political instability etc. In reference to it the road map of 12th 5 year plans (2013-17) brings optimism, which expects the growth to 7. 4 to 7. 6% in 2013 (FY) and 8. 6 per cent in 2014 (FY) with some major policy reforms (FDI, taxation, etc) interpreted into account.Tyre Industry- Overview The demand for tires globally by 201 5 is expected to be in the value of 3. 3 billion units (USD 220 bn) with a 4. 7% annual growth in units. The APAC region (Asia Pacific) is the largest market for tyres and signals strong demand in the future. The increase in income of the developing countries would be supported with the demand for automobiles thus would ultimately create a demand for tyres (World Tyre Report). India has the organized tyre maket (apart from bicycle tyre industry) and is dominated by cross ply tyres.Major contributor to the industry is the Commercial Vehicle (CV) tyres followed by Passenger Vehicle (PV) tyres. Remaining share is taken over by the 2 and 3 wheelers, tractors, construction equipment and Off-The-Road (OTR) tyres. The size of the Indian tyre industry in 2011-12 was around Rs. 389 billion, and is estimated to reach Rs. 443 billion in 2012-13, with 14 per cent growth. One important segment of tyre industry, i. e OEMs (Automobile Manufacturers) are bound to grow in the future but frequent hi kes in pursuit rates, rise in fuel prices, high inflation.Reviving the India Growth Story, Union Budget 2012 by PricewaterhouseCoopers IBS Hyderabad Page 5 etc slows down the growth of automobile field. The sector that grew 30% in 2010-11 grew only to 2% in 2011-12. 2 (See table Categorywise Tyre Production Exports in India for FY 2010-11 and 2011-12 to have full picture of Indian tyre production and exports) The Indian tyre industry- Snapshot Total turnover Tyre Production (Tonnage) Total Tyre Production in all categories Number of companies Companies function Rs.389 billion Rs. 14. 88 lacs MT 1,192 lacs 39 Top 10 companies account for over 95 per cent of the total production Source Automotive Tyre Manufacturers Association (ATMA) There three broad areas through which Indian Tyre Industry creates demands (% contribution by each segment in 2011-12 are given below), The 2011-12 growth of tyre industry is completely attributed to the increased export contribution and particularly from the bus and truck segment. Different Segments % Contribution to Indian Tyre Industry in 2011-12Replacement Market 26 63 OEMs Exports a. Replacement market- The nature of the replacement market is the margin creator. This is the important spot through which the manufacturers has an upper hand (relative to other segments) and hence it dominates the Indian tyre industry. With the increase in number of driving licenses registered, with increasing self driving habits in India, whereby the tyre gets depreciated soon, there is a large scope for the replacement market? s growth. b.Original Equipment Manufacturers (OEM)- The OEM segment has dominance over the tyre manufacturers due to the competition and uniformity in quality hence it has thin margins but plays with high volumes. In this segment the tyre manufacturers reputation, 2 The Economic Times, January 2012 IBS Hyderabad Page 6 capacity to supply large orders, working(a) together, quick delivery with customization and price pla ys dominant role in securing and retaining an OEM. Due to uncertain global conditions and job market it is expected to grow modestly at a rate of 11-13% in 2012-13.