During 2018-19 the country saw growth momentum in the rural sector due to normal monsoon favorable financing options and government budgetary support. This resulted in the Indian tractor industry witnessing a double-digit growth for the third consecutive year. However the last quarter of the financial year was impacted due to key macro events including electionhs liquidity crunch and high auto dealer inventory. During the year our business was also impacted by significant increase in raw material costs such as natural rubber synthetic rubber and carbon black. Despite these transitory headwinds our sales for the year were Rs 1912 cr which is 11% higher than last year. I believe our innovation technology leadership and award-winning products are as strong as they have ever been and are the core of the global strength of Goodyear brand.
The Farm tire industry delivered a robust growth driven mainly by Original Equipment Manufacturers (OEMs) due to positive business sentiment and moderate monsoon.As a significant player in this category the Company continued to work with its customers collaboratively and with agility to sustain our business growth in line with industry demand. The business focused on delivering sales and marketing excellence together with innovation and operational excellence to win in the market. This helped the Company to sustain its leadership in this category.
Consumer Replacement business witnessed positive growth in Financial Year (FY) 2018-19 after a strong recovery post demonetization and policy changes. Positive long-term economic outlook and growing vehicle population are expected to drive future industry growth for the consumer replacement business.
I am pleased to share with you that your Company has continued multi-pronged actions in both businesses to deliver a robust bottom line while intensifying efforts in the passenger vehicle market. Some of these initiatives are:
Excellence in key account management in Farm OE business which not only resulted in maintaining market leadership position but also resulted in recognition by four key customers.
Building brand salience and trade loyalty in Replacement business for both Farm and Consumer businesses. Improving overall brand salience with increased efforts in developing innovative marketing initiatives with a strong focus in digital to maintain and enhance the value of the Goodyear brand.
Revitalizing product portfolio in passenger vehicle business with the introduction of new and differentiated products in both passenger car and SUV segments. Similarly new products were introduced to cater to infrastructure segment and higher HP segments in the Farm business.
Driving channel expansion by increasing presence of Goodyear exclusive stores in Consumer business to improve our reach to the consumers; thereby making it convenient for them to buy Goodyear. Focus on channel expansion to build distribution footprint in the Farm Replacement channel with an addition of over 400 + new channel partners.
Our manufacturing teams also have consistently improved plant operational efficiencies. During the year the Environment Pollution (Prevention & Control) Authority (EPCA) imposed the shutdown of all manufacturing units around Delhi NCR due to pollution related issues. As a responsible corporate the Company is fully committed to the community and compliant with applicable laws. Goodyear's Ballabgarh plant demonstrated operational excellence in handling various disruptions and further improved on efficiencies to give higher production with lower cost of manufacturing operations.
Our performance was recognized by our business partners and industry associations. The Company is proud to have received the following prestigious awards during the FY 2018-19:
(i) Your Farm & Commercial business received awards from four major OEMs: a. Supplier Excellence Award from Mahindra Group Company b. Best Supplier Award from Tractors and Farm Equipment Limited (TAFE)
c. Best Delivery 2018 award by Escorts to Goodyear India's Farm & Commercial business for the third time in the last four years.
d. Excellence Award for its commendable performance during John Deere Supplier Conference in 2018 for the 4th time in a row.
(ii) SUV Tyre of the Year 2018 and Company of the Year - Environment & Sustainability at the Tyre &Rubber Industry Leadership Acknowledgement (TRILA) awards 2018.
(iii) Prince Michael International Road Safety Award under our CSR Initiative 'Safer Roads Safer You'.
As we enter the new year we are witnessing headwinds due to market slowdown in both Farm and Consumer OE businesses. However Replacement businesses in both Farm as well as Consumer are showing a positive growth trend to mitigate some of the OE business impact. With near normal monsoon predictions and a majority government in power we are optimistic about initiatives government is likely to take to boost the urban and rural economy which will be expected to result in stronger business sentiment and growth. The consumer tyre industry is witnessing a shift in demand for premium cars thus fueling growth in luxury and SUV segments. This is expected to create opportunities for the business togrowvolume and improveprofitability.
Overall we continue to be optimistic about the long-term industry outlook and our performance in FY 2019-20.We will continue to focus on growth and profits and build on the values of innovation and sustainability. Our plans are supported by investments in assets and capability in the years to come.The strength of the Goodyear brand our strategy of winning in the most profitable segments of the market our aligned distribution network and innovating to meet the needs of our most demanding customers will be amongst the most important drivers of our growth in the years ahead. At Goodyear our associates are the source of our innovation and the backbone of our strategy. They embody the spirit of the Company by collaborating with consumers and customers to deliver the highest quality products processes and programs. We are excited about the opportunities ahead and believe in our ability to make the most of them.
I would like to thank you our valued shareholders for your continued support confidence and trust. I wish you and your families the very best for the year ahead.
Chairman& Managing Director
Goodyear India Limited