NEW DELHI: Indian tyre manufacturer Ceat has announced a strategic shift in its business priorities. The company now places its main focus on growing its overseas operations. This move comes as Europe emerges as a significant market for the firm, even amidst rising geopolitical tensions and renewed concerns about global tariffs.
International Business Drives Profitability
Arnab Banerjee, the Managing Director and CEO of Ceat, explained the rationale behind this focus. He stated that the company's international business consistently delivers better profit margins compared to its domestic sales. These domestic sales include tyres sold directly to consumers as replacements and those supplied to original equipment manufacturers (OEMs) for cars and trucks.
"We want our presence and importance to grow in the international segment because it adds more to our margins than the replacement and OEM businesses," Banerjee emphasized. "Our clear focus is to expand this international arm."
Europe Shows Strong Traction
Banerjee highlighted Europe as a particularly promising region. "Europe is a substantial market for us. We are gaining good traction there," he noted. The company has secured OEM approvals for its entire five-way tyre product line in Europe, which has performed well and contributed to this positive momentum.
US Market Faces Uncertainty
In contrast, the outlook for the United States market remains unclear. Banerjee attributed this uncertainty primarily to ongoing tariff-related issues. "The US situation is unpredictable at the moment. We are waiting for the tariff environment to stabilize," he said.
The company is actively building its distribution network in the US. To manage the cost pressures from tariffs, Ceat has absorbed some of the impact by sharing the burden with its channel partners.
Improved Domestic Sentiment
On the home front, Banerjee reported a positive development. He observed that demand sentiment within India has shown signs of improvement. This provides a stable base as the company pursues its aggressive international expansion strategy.
