Leading tyre manufacturer CEAT has increased its production by 80 Percent in all units from Zero as there was a sudden increase in demand which has resulted in the company using all of its inventory.
CEAT which is based in Mumbai saw a surge in demand in the replacement market as well as from the manufacturers of two-wheeler. The company had to shutdown its production activities and sales in the month of April. However, the demand for their tyres stacked up in the month of may and as soon as they decided to reopen gradually in the month of June, they saw a sudden surge in demand for their products.
Various two wheeler manufacturers such as Hero MotoCorp, TVS Motor Company and Bajaj Auto have already settled down with the pre-Covid sales levels. Many car manufacturers have been able to recover and come back with full force. In the agricultural sector, tractor sales in the month of June have reached a level where it is the third highest in 30 months.
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Kumar Subbaiah, Chief Financial Officer at CEAT stated that it has been important for the company to produce and store inventory because of the lockdowns caused by the pandemic outbreak. Two wheeler companies are functioning well in terms of service and production whereas, OEM are operating at a lower level.
It was clearly mentioned by Subbaiah that the units are operating at 80 percent to meet the demand and increase the company's inventory.
As the retail shops and their services began operations after the month of June, the demand for the replacement market also gradually increased. Due to the unexpected increase in demand for products, the inventories were outnumbered. The commercial vehicle industry also saw an increase in utilisation of the tyres from CEAT.
About CEAT:
CEAT is a leading tyre manufacturer with six different facilities all over the country. CEAT has a dealer network of more than 4,000 which includes 300 two wheeler tyre distributors. The company has been the leader in two wheeler replacement tyre sector for many years now.
