Metro Tyres on Thursday said it aims a 10 per cent growth in turnover this fiscal to Rs 330 crore (Rs 3.30 billion) and Rs 500 crore (Rs 5 billion) in the next three years on the back of a foray into the domestic two-wheeler tyre market in technical alliance with Continental AG of Germany.
The company would also invest Rs 20 crore (Rs 200 million) this year to increase production of two-wheeler tyres at its Ludhiana facility, Rummy Chhabra, managing director, Metro group, told PTI in New Delhi.
The Ludhiana plant, which was set up at a cost of Rs 40 crore (Rs 400 million), would start production by the middle of October, and the company hopes to garner five per cent market share this year in the two-wheeler tyre industry, he said.
Metro Tyres, one of the major players in the bicycle tyre market, entered into a technological and off-take agreement with global tyre maker Continental last year.
At present, the plant has a capacity to manufacture 50,000 tyres and tubes per month which would go up to 100,000 units next year, Chhabra said.
"In the Rs 1,000 crore (Rs 10 billion) domestic two-wheeler market, we are confident of having five per cent market share, 20 per cent of the market as original equipment manufacturer (OEM) and 30 per cent of the markets abroad," he said.
Continental would outsource tyres from India and sell them in the overseas markets under the same brand name. The off-take agreement was for Europe, the United States, Canada and Japan, he said, adding, "In the rest of the world, we can sell on our own with the Metro brand name."
Metro Tyres, which has a 22 per cent market share in the bicycle tyre market, would focus on the replacement market with the new range of tyres, Chhabra said.
Even in the bicycle tyre industry, 80 per cent of it was dominated by the replacement market, and the same holds true for the two-wheeler market, he said.
"We are also in talks with all major two-wheeler manufacturers like Hero Honda, Bajaj and TVS among others for supplying tyres and tubes as OEMs, but the whole process is time consuming," he said.
Metro Tyres would also recruit a workforce of 500 to handle the new business and appoint 300 dealers in North India to support the new venture.
In India, the two-wheeler range of tyres will be sold under the brandname of 'Modi Continental'.
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