Kanwar plays a pivotal role in the company’s operations and the articulation of its business philosophy and it has been his unrelenting guidance that has lead the company from strength to strength. Vikram Gour speaks with Kanwar about the present status of business for Apollo Tyres considering the market slowdown, market trends and the group’s future plans.

What is the current scenario in the tyre market for both passenger and commercial vehicles considering the economic slowdown that has affected the automobile industry in a big manner?

The passenger car segment has been badly impacted. As car sales have plummeted, tyre sales have also gone down proportionally. Apollo Tyres however has managed to maintain a growth of 22% despite the overall scenario as exports have helped in tiding over this period so far. In terms of the commercial vehicle tyre segment, we witnessed a growth between 22% and 23% in the first two quarters of 2008-09, however, the last quarter saw a serious drop.

Looking at the last quarter, we have witnessed a rise in raw material cost by 35% as compared to the same period last year. OEM demand has fallen by 43% in terms of value. All this has impacted tyre costs and though we have absorbed some of it, there is still an amount passed on to the buyer. Exports however have registered a growth of 37% as compared to Quarter 3 of last fiscal year.

How about exports? Considering that it has helped in tiding over a rough 2008 so far, will you enhance your focus on this area?

Exports are an integral part of our business no doubt. Our acquisition of Dunlop has given us an edge over other players for we are able to cater to the western market and South African market with those products and our Apollo brand products have conventionally catered to the Asian market. As a company there is a major thrust towards expanding our export portfolio, but at the same time we need to do well on the domestic front. Having said that, we do have plans to use our facilities to cater to a growing export demand in the future.

What measures is Apollo taking in order to counter the market slowdown?

We have constantly benchmarked ourselves with the best tyre manufacturers in the world. We look at their practices and system processes in order to learn and implement the best practices at our facilities. The slowdown has resulted in us tightening our belt and building on our efficiencies. Yes, we have had to downsize on some contract and casual labour at some of our facilities, but other than that we intend on riding through this phase by enhancing our efficiencies. Our growth plans are on target and this too will boost our capabilities in the coming years. Our plants are working on a 24/7 basis as well.

Could you elaborate on your growth plans?

We are currently in the process of setting up a Greenfield facility in Chennai. This new plant will be ready by 2010. Further to this we are also expanding our Baroda facility in Gujarat. We have invested over Rs 600 Crore in the Chennai facility and around 250 Crore in the Baroda expansion, which incidentally will be completed and commence production by March 2009.

Apollo Tyres has had plans for the European market for sometime now. Could you shed some light on the status of these plans?

These plans are on track and we are currently working on preparing the products for the European market. The Chennai facility will also cater to this line of products. Our prime focus right now is to develop a range of snow tyres as well as 4×4 tyres, as we see good demand for such products in Europe. We are preparing tyres in European sizes and our Research and Technology center in Germany is behind the hard work on these new products.

We have already tested our products on testing tracks in Europe and the results show that we are more than capable of making great tyres for that market. The tyres will be branded as Apollo Tyres and this will mark our foray into the European market in a big way. We are quite bullish of the prospects.

Incidentally Volkswagen has already appointed us as their global supplier for tyres. Even the new Polo, which will debut in India sometime in the future, will come on Apollo Tyres. (Tire Review/Akron)