New Delhi, Aug. 5: Metro Tyres will focus on the eastern market to boost sales of its new automotive tube venture.

After manufacturing bicycle and motorcycle tyres, the tyre company has entered into the four-wheel tube market with an initial investment of Rs 40 crore.

“For the domestic automotive tube business, we will focus on Bengal, Orissa, Bihar, Jharkhand and Assam,” said Rummy Chhabra, group managing director, Metro Tyres.

The coal producers of the east transport the produce in trucks that are sometimes overloaded. “Hence, the life of truck tubes is low. This results in a huge consumption of these tyres. Considering this potential, we are planning to explore this market,” he added.

In technical collaboration with the Continental of Germany, Metro Tyres has set up an export-oriented unit in Gurgaon (near Delhi) to manufacture tyre tubes for cars, buses, tractors, earth moving equipment and other light commercial vehicles.

Under the agreement, 80 per cent of the production from this unit will be exported to Continental for selling in the European and American markets. Balance 20 per cent tubes will be sold in the domestic market under the brand Metro Continental.

Talking about tie-ups with original equipment manufacturers (OEM) for the Indian car market, Chhabra said, “At the moment, we are not considering any tie-ups with OEMs. We have a limited capacity for domestic production, and the focus is on meeting the demand for Continental.”

Regarding plans to acquire Bangalore-based two-wheeler tyre company Falcon, he said “Yes, there is a proposal in the market, but we are yet to take any decision on it.”

Falcon, which sells tyres under its flagship brand, Dunlop, is one of India’s largest manufacturers of motorcycle and scooter tyres with a production capacity of 4.5 lakh tyres per month. The two-wheeler market is currently pegged between Rs 1,200 and Rs 1,300 crore. Metro is also planning to increase capacity from 50,000 tyres per month to 1.5 lakh tyres in the next 4-5 months.