In order to further augment its position in the domestic and international markets, Apollo Tyres plans to invest up to $600 million (about Rs. 4,000 crores) in the next fiscal to enhance capacity at its plants in India and abroad.
The company, which has also announced its foray into the two-wheeler market, will start rolling out tyres from its upcoming plant in Hungary by January next.
“We plan to spend around $500-600 million as part of our capital expenditure in the next fiscal on our two plants in Chennai and Hungary,” Apollo Tyres Vice-Chairman and Managing Director Neeraj Kanwar told PTI Economic Service.
He said the company is doubling the capacity of its Chennai plant to 12,000 truck and bus radials (TBR) a day from 6,000 earlier.
The Gurgaon-based tyre maker, in the field since 1972, has, over the years, grown manifold, establishing its footprint across the globe. It has manufacturing units in India and the Netherlands. It is also setting up a new manufacturing facility in Hungary, with a planned investment of 475 million euro.
The company markets its products under its two global brands, Apollo and Vredestein, and its products are available in over 100 countries through a network of branded, exclusive and multi-product outlets.
At the end of its financial year on March 31, 2015, Apollo Tyres clocked a turnover of $2.08 billion, backed by a global workforce of around 16,000 employees.
Commenting on the company’s foray into the two-wheeler segment, Mr. Kanwar said it is a part of a move to offer a complete range of products for the automotive industry. Initially, the company will sell its Apollo Acti series of tyres for motorcycles and scooters in the aftermarket.
“Today, we are selling all types of tyres except two-wheelers. The Indian two-wheeler industry has been growing and it is time that we entered the segment,” Mr. Kanwar said.
The Indian two-wheelers category is growing at around 8.5 per cent. As per estimates, there are about 120 million two-wheelers in the country.
Asked about expectations from the category, Mr. Kanwar said it’s too early as competitors like MRF, Ceat and TVS have been in the market for a long time. “We are, however, confident of doing well in the two-wheelers segment considering our brand equity. We entered TBR late in 2008, but we are leaders today. Similarly, we entered passenger cars in 1999-2000 and are among top two players,” he added.
In the first phase, Apollo Tyres will offer two-wheeler tyres which are “coverage oriented”, followed by performance-oriented range in the second phase. The company has outsourced production of two-wheeler tyres in south India.
Depending on the demand and growth of volumes, the company will decide where it will manufacture the two-wheeler tyres on its own. It is looking to sell five lakh two-wheeler tyres per month over the next two years that would translate roughly into 10 per cent of the market share.
In the next five years, the company plans to offer both bias and radial tyres and attain a market share which will be close to a leadership position.
– PTI Economic Service