JK Targets 100 Retread Franchisees by 2020
Indian tyre manufacturers are increasing their engagement in the domestic retreading sector, dominated largely by unorganised low-quality retread shops. The increasing involvement of major tyre brands is expected to bring the required technology to the sector and help eradicate some of the more primitive methods used to retread tyres.
Tyre makers are now expanding their networks throughout the country, following the dedicated franchisee model. They are bringing existing retread outlets into their fold and convert them to their own franchisee networks, which hold them to follow certain quality guidelines and specifications laid down by the tyre companies. Typical of this is JK Tyres, who have introduced customized retread solutions through a network of concept stores opened in various part of India.
“The JK Tread concept retread stores provide quality solutions based on a ‘cradle to grave’ model,” explained Sandeep Jain, the company’s head of retreading. “Our first concept store opened in November 2016, and our initial focus was more on the southern part of the country, where retreading had gained greater acceptability compared to other parts of India,” he explained.
Before introducing the franchisee model, JK Tyres was selling tread rubber in the open market. “There was no exclusivity involved, merely selling tread, but with improving road infrastructure in the country and growing radial penetration, retreading presents an opportunity to grow. We are producing tread rubber, and expansion in developing a dedicated retread franchisee network spread over India seems a good business proposition,” he said.
In just over two years, JK has expanded its number of concept stores to 25, and plans to have 100 outlets by 2020. The company has nine stores in the South, seven in the East, five in the North and two in the west. Two of its biggest concept retread stores are based at Karur (Tamil Nadu) and Raipur (Chattisgarh).
Initially JK focused on the South and eventually branched out to all parts of the country. “The prospects of retreading are growing with improving roads, restrictions on loading and the growing number of multi-axle vehicles particularly in the North and East, besides growth in light commercial vehicle market. Therefore, our focus has now shifted towards having a presence in these two regions. We have a small presence in the Western part of the country, where we hope to gain ground in the near future,” he clarified.
JK aspires to add 25 more concept stores by the end of 2018 to take the number of franchisees to 50 and aims to add another 50 by 2020. Concept stores are installed with plant machinery and equipment sourced from vendors like Rajmahaal and Glisten.
Meanwhile, the tread rubber is being produced at JK’s tyre making plant at Kankroli in Rajasthan, currently, producing about 500 tons each month. “Capacity could be doubled at any time depending on the demand. Moreover, it is going to be doubled with the increase in number of franchisees,” said Jain. A tread rubber capacity increase has already been approved by JK Tyre management.
According to Jain, JK is also considering a foray into fully-fledged retreading soon. “We are considering to set-up company-owned retreading plants near to our tyre producing facilities by the end of 2018 or early 2019,” he explained. “The plan is to build modern state-of-art retreading facilities, installed and operating with the best equipment in the business.” The company-owned retread facility plan is also in the final stages of approval.