An employee works inside the warehouse at the Apollo Super Zone showroom in Mumbai
Tyre major Apollo Tyres has said that it will be among the top three players in the two-wheeler segment. The company entered into this segment in March 2016.
Addressing the company's shareholders in Kochi on Tuesday, Apollo Tyres Chairman Onkar S Kanwar said, “The year 2015-16 will be remembered as a watershed year for the company.”
The financial year began with the announcement of the construction of the greenfield facility in Hungary. This is the first time any Indian tyre company has set up a greenfield outside India. The company expects to roll out the first tyres from the Hungarian plant by early 2017. "This will help the company to offer a larger product portfolio to its customers in the highly profitable European markets and increase our market share," said Kanwar.
During the fiscal, Apollo Tyres acquired Germany-based Reifencom GmbH – which the company hopes will increase the visibility and its online presence in countries like Austria, Switzerland and France – will further support the growth of the retail network in Europe and also help sell tyres online in other key markets outside Europe.
The other major step the company took was its entry into the two-wheeler tyres market.
The company's research and development (R&D) team in Chennai worked over the past two years in developing the two-wheeler tyres, which were rolled out in March 2016. "With the offering, Apollo Tyres is a full-range player and the two-wheeler tyres will support the company's vision of creating a stronger and profitable company," said Kanwar.
“With a clear strategy laid out for the next two years, including the necessary marketing, advertising and R&D push, I am confident that we will soon be among the top three players in this segment,” added Kanwar.
Apollo Acti series, for bikes and scooters, would cover nearly 85 per cent of the replacement market for two-wheeler tyres in India.
The two-wheeler category, which is growing at a compound annual growth rate of 8.5 per cent in India, has a huge potential for tyre manufacturers. According to rough estimates, India currently has 120 million two-wheelers. This, in addition to the demand from the business partners for the company’s two-wheeler tyres, led to Apollo Tyres’ foray into the two-wheeler tyre segment.
Further, Kanwar said, "Launch of the high-mileage passenger car tyre Apollo Amazer 4G Life, that can run up to 100,000 kms, or the foray into the retreading business or the marketing push for the truck bus radial segment are now bearing fruit as your company continues to gain market share in other segments of the industry."
"The company is doubling its capacity in this key segment to further consolidate our leadership position," he said, adding, “... If a company only focuses on profits and growth, it is unlikely to create a long lasting institution and leave a legacy for our future.”
Further, he said, "For us the belief comes from within, that without giving back to society no business can be truly successful and sustainable in the long run. It is for this reason that sustainability is at the core of the company."
He also outlined the company's goals and aspirations, as part of the company’s Vision 2020, to be a premier tyre company with a diversified and multinational presence.
"The company will continue to invest in the brands, have a sharp focus on technologies and expand into new markets and consolidate and increase existing market shares," said Kanwar.
“The economic revival that is underway in India is an opportunity for us to benefit from all our past investments. The global economic scenario, while not as exciting as India's, still affords a smart and agile player like us many windows to further grow our business profitably. I started by saying that the past year was a watershed one, and I am convinced that we are today looking at a very bright and prosperous shared future together,” he added.