India’s Business Standard newspaper quoted Onkar Kanwar, chairman and managing director of Apollo Tyres, as saying: "We are holding talks for supply of car radials for Volkswagen vehicles, which are expected to roll out in the second half of 2009-10.”

It is not clear if the deal will cover Europe or just India. According to reports, Volkswagen recently firmed up its plans to set up a car plant in Chakan near Pune and is expected to sign a memorandum of understanding with the Maharashtra government by the next week.  

Apollo currently sells 30% of its production into the original equipment market. Despite the fact that OE margins are well-known for being considerably slimmer than aftermarket sales, Kanwar said Apollo is aiming to increase OE sales to 35% of production.
 
At the moment, 85% of Apollo’s revenue is derived from domestic sales; however, the company is aiming to increase export sales in the coming years.