SWOT analysis of CEAT Tyres

Ceat Tyres Limited is a company that was started in Turin and is currently based out of Mumbai and manufactures and sells automobile tyres, tubes, and flaps. The Company is one of the top producers of radials for multiple kinds of vehicles. The company manufactures tyres for light commercial vehicles (LCVs),  two-wheelers like motorcycles and scooters, passenger cars, farm vehicles, and trailers, off the road (OTR)/specialty vehicles and trucks, among others.

With a production capacity of around 95,000 tires per day, the company has registered an annual turnover of close to USD 1 billion.

Strengths in The SWOT analysis of CEAT Tyres

Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. The following are the strengths of Ceat:

• Wide product portfolio: The CEAT brand is popular for its motorcycle tires which are sold under the labels CEAT Zoom, CEAT Zoom Tubeless, F67, F85, Milaze, Secura Sport and Secura Zoom, etc. The company also manufactured tires for scooters under the labels Gripp and Zoom D and passenger car tires under the names Czar AT, Czar HT, Rhino and Rhino TQ. Their range of tires for commercial vehicles are Buland and Buland Mile XL RIB while for three wheelers it is Anmol SL and Buland Mile XL. In addition to this, it also manufactures tires for farm and agriculture vehicle and specialty tires for mining, quarrying, rock excavation, construction and port applications.
• High brand visibility: Ceat Tyres is a popular brand in India and has high brand recall and recognition. The company has been consistent in its advertisements and has been always communicating the same value proposition of being value driven as well as technical savvy.
• Focus on customer needs: Ceat has always based its products on customer feedback and has always been modifying its products in accordance with customer perceptions. The latest focus of the company is on technologically superior products and on driving safety.
• FMCG model distribution channel: Quite unlike other tyre manufacturers the company has modeled its distribution channel on FMCG companies. Instead of selling tyres to the customer directly they have added an intermediate layer of dealers who sell it to sub-dealers.This has helped them to widen their reach considerably.
• Advertisements: The company has been undertaking a lot of promotions lately and some of the latest campaigns like the Nimbu Mirchi one has been able to grab the customer attention significantly.

Weaknesses in The SWOT analysis of CEAT Tyres

Weaknesses are used to refer to areas where the business or the brand needs improvement. Some of the key weaknesses of Ceat are:

• No market leadership: Though Ceat has the presence in multiple categories like two equipment and specialty tires it is not a market leader in any of these categories though it has strong brand presence.
• Low margins: The key focus area of Ceat is on truck radial tyres and in this domain, the competition is high because of which sales volumes are low and the margins are high.
• Focus on too many segments at a time: The company focuses on too many segments at a time and this has resulted in diluting its presence in all segments and they were rendered incapable of beating the competition and this was thinning down the already scarce resources.
• Low focus on after sales service: Though Ceat Tyres has a lot of customer service outlets the quality of service is poor. There are a lot of complaints about the behavior of the personnel in the service outlets as well.

Opportunities in The SWOT analysis of CEAT Tyres

Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. Some of the opportunities include:

• High growth potential: The country has around 60 manufacturers of tyres both big and small, some of whom are regional players. The growth rate of the tires market is around 9 % per year between 2015 and 2021. The highest growth is predicted for the two-wheeler tires.
• Changing Customer Needs: The customer needs are changing continuously and currently the demand is for driving safety and comfort. This is creating a huge market for tires which have high grip.
• Growing market for passenger cars: The market for passenger cars is growing in India and many multinationals are setting shop in India. This will result in the increase in demand for OEM’s.

 

 Threats in The SWOT analysis of CEAT Tyres

Threats are those factors in the environment which can be detrimental to the growth of the business. Some of the threats include:

• Competition: The company faces stiff competition from brands like JK Tyres, Apollo Tyres, Dunlop, Bridgestone, Michelin, Good year and Cooper Tires in India.
• High cost of material: Materials used in tires like synthetic rubber, carbon black, steel reinforcement, chemicals etc are highly fluctuating and this will invariably affect the final pricing of the products,