AS

Larger fleet operators are expected to take the lead

in moving towards radials to upgrade their fleets and
reduce overall running costs
Vehicle buying & tyre selection characteristics

Description Examples of New Vehicle Buying Issues faced Tyre Sourcing Strategy Preference for Radial Tyres
Companies Criteria

Size: 100 - 1400  TCI  Client demand for new  Getting loans for new  Have long standing  Awareness in terms of
Type of Fleet: Trucks & vehicles vehicles relationship with tyre benefits of radial tyres is
 Fedex - AFL
Trailers  Gradually upgradation  Time lag in getting dealers by region high
Average Speed: 50 Kmph  RR  Prefer radial tyres for long
from normal trucks to hypothecation done  Decision to change the
Office: Transport Hubs Roadways haul distances to reduce
Volvos with higher once a fleet operator tyre brand is taken by
Repair: Transport Hubs  Ideal overall cost / mile
technology decides to sell his old the owner
Transport  Prefer radials for new type
 Reducing the age of vehicle  Vehicles running for of vehicles - increasing
 All Cargo their fleet  Waiting periods for longer distances get requirement as they are
Global some models of radial tyres; local upgrading their fleet
HCVs vehicles get bias tyres

Size: 25 - 100  Omkar  Prefer to buy second  Getting loans for new  Upfront capital is a  Awareness in terms of
Type of Fleet: Trucks & Logistics hand vehicles vehicle especially for problem - prefers the benefits of radial tyre is
Trailers  Gurusevak  Change a vehicle a second hand cheapest option minimal; shift towards
Average Speed: 50 Kmph vehicle available in terms of radials is slower
Transport
Office: Transport Hubs – Only when they attain price & looks for the  Take big transporters as
Repair: Roadside  Rajshree the maximum  Repeat maintenance maximum credit role models & start shifting
mechanics Carriers permissible age as becomes a problem to radials when they do
per RTO norms  Prefer bias tyres due to  Will wait for market
 Affected by the lower upfront cost feedback rather than being
– Maintenance costs
become very high seasonality of the first one to take the
 Go for retreaded tyres
demand plunge
when plying shorter
distances

Booz & Company

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 AS

Almost xx% of the retail tyre sales for new truck tyres
takes place in transport hubs located across the
country Tyre Markets – Example Delhi
PRELIMINARY

ck Government Tyre Fitment & Servicing Locations

tru s
ew t hub Transport Hubs
of
ale nsp
n
or WIP
t ail s n tra
i  Developed outside of metros Inside Outside
re
of lace and large cities, by local Transport Hub Transport Hub
o rity es p
j
Ma s ta
k governments
e
tyr  Tyre dealers have re-located Tyre Fitment 65% 10%
from inside cities to these
locations
Unorganized Transport  Even those not located here Used Tyre Market
Hubs have to deliver most of new Emergency 10% 15%
 Tend to get formed near areas of tyres here on order  Deals exclusively in used tyres, Servicing
high fleet concentration retreaders also exist nearby
 Tyre dealers are traditionally  Domestic and imported (mainly
located around these areas China) used tyres
 Even those not located here have  Concentrated near transport hubs,
to deliver most of new tyres here on dedicated markets in metros (e.g.
order Delhi)

Isolated Dealers Wholesale market

“…over 75% distribution in TN &
 Located inside city, spread  Few wholesale markets transport hubs …”
across across India, biggest located
in Delhi (Novelty market) – Fleet Owner – Industry Expert
 Many have moved to
transport hubs as restrictions  Mainly B2B trade, with cash – Tyre Dealer
on activity/traffic have come sales from bigger dealers to
into force smaller dealers from outside
town
 Business due to relationships
with fleet operators,  Deals only in new tyres
warehouses at hubs

Source: Booz & Company analysis, Interviews

Booz & Company

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 AS : Updated Place

“Transport Nagar” is a truck transport hub with fleet

owners co-located with related goods and service
providers Typical Transport Nagar Ecosystem

Truck care and

services

Repair & Maintenance

Fleet Operator Office Ware
house

Fuel Station
Warehouses & Loading
docks

Parking Bays Spare Parts

“…decision to replace tyres is taken by the fleet owner, except in emergency…”

“…transport nagar is where all your business is…including decision maker…”
“even when in the transport nagar you will still have to go to the office of a fleet operator…”
– Industry Expert – Fuel Company – Tyre Dealer
Source: Booz & Company analysis, Interviews

Booz & Company

8 November 2010
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 AS Place

There are three major types of transport hubs based

on types of activities and facilities available

Classification of Transport Hubs

Based on Facilities Available

Basic Intermediate Established

Parking

Taking Orders / Contracts Minimal

Maintenance & Servicing

Warehousing Facilities Minimal

Examples  Wadala Truck Terminal,  Kalamboli, Mumbai  Sanjay Gandhi Transport Nagar
Mumbai  Ghazipur Freight Complex  Namakkal
 Chennai Truck Terminal

Booz & Company

8 November 2010
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 AS Place

Transport Hubs usually have high fleet concentration

due to industrial/logistics activity or traditional fleet
related activities
Distribution of Activities Inside and Outside Transport Hubs
Activities Inside Transport Hub Outside Transport Hub
Public Maintenance Public
Space Operator Fuel Operator Service Space
Office Maintenance Station Hub Center Fuel Station
Ware Ware
house house

1. Waiting

2. Receive Orders

3. Loading

4. Transport

5. Fuel / Emergency

6. Unloading

7. Maintenance

High Medium Low

Booz & Company
8 November 2010
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0 Place
AS

Transport hubs are either naturally formed hubs or

developed by local governments, associations or
companies Evolution of Transport Hubs
 Type C: Private
Proliferation of natural
hub Type B: Organized
 Decongestion of city

E.g., TCI
A B Type A: Natural
Organized E.g., Sanjay hub near
Natural / Gandhi Bangalore
(Government /
Transport Nagar
Unorganized Association
E.g., Kalamboli
Driven)
Government developed to

pi hsr e n wO
Self-evolved transport
hubs near regions of decongest cities or by
high fleet concentration associations to organize
large natural hub

Time

Natural Organized Company Owned

% Desirable 30% - 50% 70% - 80% 95% - 100%

for TC
C
 Expansion of private Spread Over large area Compact Compact
Company
transport hub to outside Ownership Private Association/ Private Private
Owned/ Private players
 Alternate revenue stream
Relative Real Medium High Low
Alternate line of business for Estate Price
private logistics players or
property developers

Booz & Company

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8
AS

Major Transport hubs in India are found outside

metros and other large cities in the country
Location of Transport Hubs across India
Region-wise Tier I and Tier II cities
7
North
6

4 4 4
3
2 2 2Tier I
Tier II
1
West North South Central East and
East
West North- East
Central
Estimated # of Transport Hubs by Region

17
15 15 Total # of hubs:
60

South 8
5

West North South Central East and

North- East
Note: Tier 1 city defined as having population greater than 1.4 Mn by 2001 census. Tier 2 city : population between 1 and 1.4Mn in 2001 census.
Assume 3 hubs near Tier-1 city with population greater than 5Mn, 2 hubs at other Tier-1 cities and 1 hub near Tier-2 city
Source: Booz & Company analysis, Interviews

Booz & Company

8 November 2010
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