India’s automobile sector is going through a bad slowdown, but one of the country’s largest tyre makers is not worried.
Most big carmakers in India, including Maruti Suzuki, Hyundai, Mahindra & Mahindra, and Tata Motors, reported a double-digit decline in domestic passenger vehicle sales in September.
“It is temporary. The showrooms will see more footfalls, and gradually we will be back on the track,” Rajiv Prasad, president for India operations at JK Tyre & Industries, told Quartz in an interview.
Based on his 30 years of industry experience, Prasad is excited about the role technology will play in the future of the tyre industry and his own company.
Sharing his views on the jobs of the future, Prasad told Quartz why data analytical skills will be of utmost importance for JK Tyre in the coming years. Edited excerpts.
What is that one job that will be most critical to JK tyres in the future and why?
It will be a job in technology and analytics.
We always feel that when a new technology comes, it takes away jobs. But what really happens is contrary to that. For instance, when computers first became popular, everyone thought they will take away jobs of manual labour. But they actually created a plethora of jobs. Now, we are saying the same thing about artificial intelligence (AI). But in reality, it is going to create many new jobs.
Also, analytics is the future. We talk about data being generated, but the question is that where is the data going and what does it do? This data, firstly, needs to be analysed and then have to be put formally to use in a way that’s simple and understandable. But do we have the skill to understand the data? No. Undoubtedly, computers are going to help us but you need manpower to get into analytics and more than that, we need interpreters of the data. So, in terms of JK Tyre or the industry in general, analytics is going to be most important.
The other is technology. When you talk about breakthrough innovation, you need to understand youngsters aren’t looking for routine jobs, they are more inclined to startups. The whole idea is how people are trying to understand the consumer and bringing in goods to make it convenient for them. For instance, Ola and Uber started with a cab service which wasn’t a stated need, it was an unstated one that got converted into a consumer need that today the customers can’t do without.
What sort of data and analytics will be useful for your company?
Let me elaborate it with an example related to sales. There’s something called buyer behaviour. In every industry, including for JK Tyre, we want to know what does the buyer actually want. We make tyres but what is it that the consumer is looking for in our product? Nobody will think about it but we need to figure it out in a scientific and analytical way. This is the challenge right now and is going to be one in the near future as well.
Like I said earlier, businesses need to create an unstated need.
What are your views on India and the world seeing electric vehicles (EVs) as the future of road transport?
I agree with it partially. I think it’s a little far fetched dream especially in the absence of a clear policy. It is still evolving and requires more research. We still don’t know what specific skill is required.
Also, how many things can a consumer understand? We already have BS-VI (Bharat Stage VI emission norms), which will be implemented from April 1, 2020. Then we are aiming for the EV switch in 2030. We should not confuse the customer over what to buy.
Besides, the slowdown in the economy has also delayed the EV plan, I think.
In August, India saw the lowest automobile sales since 1997-98. Does that worry you?
There is no need to panic. Let me back it up with an example, the average age of India is between 25-27 years. What do you think this young generation is going to do? They won’t be on bullock carts. They are all connected with the internet, they are seeing where the world is going. From an aspirational perspective, they will try to get better. Undoubtedly, they will move from a bicycle to a two-wheeler, until they can afford a four-wheeler. Now, can this fundamental change be changed? It cannot.
The slowdown is making the industry manufacture lesser but it will be back on track. The slowdown is a temporary phenomenon. The industry has also seen good growth last year.
Indian finance minister Nirmala Sitharaman said that the popularity of Ola and Uber was the reason for the slump in the auto sector. Do you agree?
Let’s face reality. Today, people are using Uber and Ola, and nobody can deny that. But the charm of owning a first car is still relevant. The salaries have gone up to that extent that the cost of a car per se feels affordable. Additionally, the financial system has become stronger, and with the easy availability of loans and cheaper EMIs, people are buying and will buy cars.
People will continue to buy their own cars due to convenience. For instance, if you want to go out with your family for some quality time, you will prefer to drive your own car and not hire a taxi. Ola and Uber will be there for a certain percentage of people but when we talk about India, we talk about a huge population.
When do you think the ongoing slowdown will end in the auto industry?
October 2020. The next two quarters of the next year will also be slow but after that things will be okay.
The government needs to clarify rules related to BS-VI norms. There should not be any confusion among the customers. Until then, it will be dilly-dallying as there won’t be registration for new BS-IV vehicle. Till the time, the current stock does not get clear and the pricing of BS-VI is not out, the slowness will continue.
Amidst the slowdown, JK Tyre has achieved the milestone of Rs10,000 crore turnover in FY19. What is it that worked right for you?
To focus on, understand and implement what we thought was right in terms of consumer connect. We have been in the replacement market as well as the original equipment market and also built up the export market. Our exports have grown by over 50% in comparison to last year. It’s a balancing strategy that has worked very well with us.
What are the new technology JK tyre is working on currently?
We recently launched a smart tyre, which can give you data and tell you how safe or unsafe you are on the road. We acquired a Pune-based company for a product called Treel, which has the technology for tyre pressure monitoring system. We have launched an app for the same. The driver can see what is the current pressure in the tyres to be safe on the roads.
However, like I said the slowdown is temporary, so one needs to hold on. That’s it.