Apollo Tyres chairman Onkar Kanwar said that the company is investing about Rs27 billion to double the manufacturing capacity of its bus and truck radial tyres. The expansion of the company’s facility in Chennai, India to increase the truck-bus radial facility from 6,000 tyres per day to 12,000 tyres per day is already underway. The first phase of expansion is likely to be completed by October 2016, Kanwar said.
Commenting on the cheap imports from China, he said: “Today they have 30 to 35% of market share. They are taking that much share in the truck and bus radial tyres. This is really impacting the market. That is a big challenge. We have taken up with our government authorities. They are looking into it.”
He also noted that countries like the US has imposed 35% import duty on Chinese tyres and all other avenues have been closed for them, but India has opened its market up for them.
“Today we have competition from all the multi-nationals — Goodyear, Bridgestone, Continental etc. So there is competition. You have to fight that competition but you cannot fight a competition which is not in market economy. Unfortunately, Chinese (are) not a market economy,” Kanwar said. He also added that Apollo Tyres has done very well this year despite the challenges.
“Last year our company had a turnover of Rs11,700 crore (Rs117 billion)… with a net profit of Rs317 crore (Rs3.17 billion). This is despite challenges,” Kanwar said.
He also said that the company’s entry into the two-wheeler tyre space has made it a full-range player.”The company’s two-wheeler tyres have been well received by the customers and business partners. Seeing this demand, the company is increasing the number of outlets selling two-wheeler tyres from 2,000 currently, to 3,000 outlets very soon,” he said.
Kanwar also said that the first tyres from Apollo Tyres’ greenfield facility in Hungary is expected to roll out early next year. “The capacity will then be gradually ramped up over the next few years. Once ready, this facility will have capacity to produce 5.5 million passenger car and light truck and 675,000 heavy commercial vehicle tyres,” Kanwar said.
The facility will produce both Apollo and Vredestein brand of tyres and will complement Apollo Tyres’ existing facility in the Netherlands, he added.
He said the acquisition of Reifencom GmbH, Germany-based leading tyre distributor with both online and offline presence, will help the company improve its mix of distribution channels in Germany and Europe.