Ceat ma d_iim calcutta

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CEAT Tyres

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Ceat ma d_iim calcutta

  1. 1. Team MaD IIM CalcuttaAshish Anand Kunal SinghVikash Sarraf
  2. 2. Capacity Allocation AssumptionsMotorcycle vs ScooterTyres • Maximize the contribution from both OEMs and Replacement market by varying the number of motorcycle and scooter tyres manufactured. • Contribution from motorcycle tyres will be less than or equal to the current 70% industry average since growth in sales of scooter tyres will be higher than that of motorcycle tyres. • Total number of tyres produced will be between 500,000 and 550,000. • Sales contribution of Motorcycle tyres in OEM will be between current value i.e. 22% and industry average i.e. 50%. • Sales contribution of Scooter tyres in OEM will be between current value i.e. 25% and industry average i.e. 50%.
  3. 3. Results • Motorcycles • OEM – 358,663 tyres/month • Replacement – 63,581 tyres/month • Total – 422,244 tyres/month i.e. 84.45% of production capacity • Scooters • OEM – 16,336 tyres/month • Replacement – 61,419 tyres/month • Total – 77,755 tyres/month i.e. 15.55% of production capacity Production per month 16336 61419 63581 358663 Motorcyles-OEM Motorcycles-Replacement Scooters-OEM Scooters-Replacement
  4. 4. Capacity AllocationOEMs vs Replacement • OEMsMarkets • Motorcycles – 358,664 tyres/month • Scooters – 16,336 tyres/month • Replacement Markets • Motorcycles – 63,581 tyres/month • Scooters – 61,419 tyres/month OEMs – 75% Replacement Market – 25% Contribution Margin Tyres Prodcuced 2011-12 Replacement OEM 2010-2011 000 000 Growth % Motercycels 300 15 3483 4827 38.59 Scooters 160 40 1931 2439 26.31 Profit Generated FY 2011 000 Replacement OEM Replacement OEM Motercycles 2716.74 766.26 815022 11493.9 Scooters 3620.25 1206.75 579240 18101.25 FY2012 1061.94 3765.06 56475.9 318582 609.75 1829.25 73170 97560
  5. 5. A) Motorcycles B) Scooter C) Mopeds2 wheeler industry
  6. 6. 2 wheeler industry (C) Mopeds Motorcycle • Market Share = 5% 78% • TVS Motors enjoys monopoly in this segment with 100% market share Scooter 17% • Other moped makers like Kinetic Motors, Majestic Motors Moped 5% and Kinetic Engineering discontinued their business operations few years back • Generally preferred in rural and semi urban areas, hence 100% TVS possibility of growth with rising disposable incomes of the rural populationClearly TVS enjoys the No. 1 position in this segment but due to very low market share in the 2 wheeler industry, it’s not much significant
  7. 7.  In the motorcycle segment HHML should be the priority OEM of CEAT with more focus on the executive segment since major growth is going to happen in that segment. In the scooter segment, the priority OEM should be undoubtedly HMSI followed by TVS since its popularity among the people is on a growing path. Since moped segment is totally captured by one company it will be easy for CEAT to capture most of this share if they provide better terms of trade to TVS than its competitors.

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