More than a year after its attempted purchase of Cooper Tire & Rubber Co. fell asunder, India’s leading tiremaker Apollo Tyres still pines for a bigger share of business in China and the U.S.
In a recent interview with Hindu Business Line newspaper, Apollo vice chairman and managing director Neeraj Kanwar, said flatly, “I cannot ignore China. If our ambition is to become a top 10 in the world, we cannot ignore the U.S. or China. I don’t have anything right now – eventually one has to enter those markets.”
But Kanwar admitted the tiremaker will need a mix of organic growth and a significant acquisition to make that leap forward, but no acquisition plans are at hand. “We are growth oriented, and we want to go to new continents,” he told the business newspaper.
Kanwar said that India represents some 55% of the company’s business, and that ratio will likely settle at 50:50. He doesn’t see India’s contribution falling below 50% “unless there is a global acquisition that takes place.”
Kanwar said the plan was to be a $6 billion company by 2016, but that will fall short by a considerable margin; 2014 sales were around $2.5 billion. Going forward, Apollo is pinning a lot of hope on its new $475 million plant in Hungary and strong prospects in Eastern Europe. “Europe gives us a stepping-stone into technology and creating brands because that’s the main thing going forward. In the next five years, we are emphasizing building both brands and technology. If we get this right the sky is the limit.”
As for opportunities in the U.S., where it currently sells only its Vredestein brand, Kanwar offered, “The answer to that market is not selling to the U.S. but sourcing there, eventually. But now we are just getting a feeling and have no plans for sourcing from the U.S. right now. Our focus is Europe, Southeast Asia and taking Hungary up to a level where we can say we have 80%-90% utilization.”
For now, the focus for Apollo, said its MD, will be on building its technology and brand awareness. “If we get technology right – the product right for the customer and build the brand around it obviously we can go pretty far,” Kanwar told the newspaper. “We’ve been working on these two pillars – we have a marketing office in London where we have people going through the brand journey and giving it new life. You will see much more of Apollo awareness drive happening in all markets. Marketing budgets are going up.
“Then comes the technology story, which is split between India and Europe,” he continued. “We have 300 technologists between the European and Indian R&D centers. We’re putting a lot of emphasis on giving people the right training, and working with universities. Cars are becoming smarter and smarter, and tires are becoming a very important part of the car. That is where we are looking at innovations.”
