Apollo Tyres Aims At MRF With Its Upcoming $1 Billion Investment

The company is a leader in the sales of commercial vehicle tyres in India and intends to dethrone MRF in the passenger radial tyre segment as well.

Apollo Tyres Limited has planned a major expansion strategy of $1 billion investment capital with an eye to capture MRF’s passenger cars tyre market dominance. Apollo is already the largest player in the commercial vehicle tyre space in India and is rapidly gaining popularity in the passenger car segment as well. The company achieved 6 percent growth compared to previous FY in March 2018, with an annual revenue of Rs 14,929 crore.

With its new plan, Apollo is pegged to surpass the Rs 20,000 crore milestone by the year 2020. The investments will also focus on the global intensification of the brand, and a better stronghold in markets such as North America. However, its plan currently doesn’t include two-wheeler tyres expansion.

The company will invest in the creation of a brand new manufacturing facility in Andhra Pradesh and will swell the production capacity of its unit in Hungary to strengthen its position in the European market. Currently, the company is also on the verge of becoming OEM tyre supplier of Ford, BMW and Volkswagen in Europe.

In an interview with ET, managing director Mr. Neeraj Kanwar said, “Our vision for 2020: we want to be a clear leader in all the product categories in India — in the farm, passenger, truck, SUV – and we are looking at price as well as volume leadership – that is our target. As far as Europe is concerned, we want to be a premium tyre maker and we are slowly but surely moving into that position.”

Speaking of the investment, Rs 3,800 crore will be pumped to the Andhra Pradesh plant. This will be creating a capacity of 15,000 radial tyres and 3,000 truck tyres every day once it goes into action by the first quarter of 2020. On the other hand, the Chennai facility will see a boost in its current capacity of 10,000 units to 12,000 units per day.

Apollo expects these investments to charge up its current market share that stands at 30 percent in the commercial trucks and buses segment. Whereas, its passenger tyres market shares hover around 19-20 percent. The company’s growth is heavily surfing on the Indian automotive market boom as it is the OEM tyre supplier to many vehicle manufacturers in the country.