ESSEN, Germany (June 6, 2016) — After Apollo Tyres Ltd.'s planned merger with Cooper Tire & Rubber Co. imploded in late 2013, the Indian tire maker quickly readjusted its sights on Europe, eventually opting to invest more than $600 million in Hungary to support its growth aspirations in Europe.
With the opening of that plant, in central Hungary north of Budapest, expected before year-end, the Indian tire maker's management is starting cautiously to consider growth plans for markets where it's under-represented — such as North America — or not represented at all.
That's the upshot of a wide-ranging conversation Tire Business had with Neeraj Kanwar, Apollo's vice chairman and managing director, at the recent Reifen trade show in Essen.
Mr. Kanwar said he considers both India and Europe domestic markets, noting, “since we have manufacturing there, we'll keep developing there first.”
More recently, though, Apollo has established sales companies in Thailand and Malaysia in order to start building the Apollo brand throughout ASEAN and the Pacific Rim, as well as in Dubai for the Middle East and South Africa for southern Africa.
“The next step will be into the U.S.,” he said, noting that China is completely out of the conversation owing to the vast number of domestic companies there.
“Our DNA is more growing toward (established markets),” he said. “We came into Europe during a recession in 2009, but we've never looked back.”
Today, Europe represents 24 percent of Apollo's global business — or roughly $500 million for the year ended March 31 — a share that is set to grow measurably as the Hungary plant ramps up.
“Similarly America is important for us,” Mr. Kanwar said. “The U.S. economy will always come back. It's growing at 2 to 3 percent and is a huge market,…the No. 1 automotive market.”
In North America — which represents only a few percentage points of Apollo's global sales — Apollo's primary business is with the Vredestein brand, “especially in Canada and northern U.S. with winter tires.” The unit, Apollo Vredestein Tires Inc. in Metuchen, N.J., started selling some small Apollo-branded OTR/industrial tires in the past couple of years.