Apollo Tyres, the second largest tyre maker catering to cars, buses and trucks, has now ventured into the two-wheeler space to become a full range tyre major.

Speaking to Bloomberg TV India, Apollo Tyres Vice-Chairman and Managing Director Neeraj Kanwar says dealers and customer demand has pushed the company to diversify. With an aim to sell 500,000 two-wheelers per month, the company looks to grab 8-10 per cent of the market in coming years, he said.

What is the kind of growth and revenue contribution are you expecting from the two-wheeler segment?

I think it is a very historic day for Apollo that we came out with the two-wheeler tyre products. It is actually covering 85 per cent of the total industry for two-wheelers both in motorcycles and scooters. It is very early days to tell you how much turnover is going to come out of it and what will be the response. I can only say that in the past two days we have forayed into the market and selling these tyres.

And there has been a positive response from the market and customers. Clearly once the sales start, I will be able to tell you better (about the revenue growth). But we have a capacity of around 1.2 lakh tyres per month and our aim is to get to 5 lakh from this outsourcing facility and then look at near sourcing facility either a green-field or a brown-field facility to try and produce these tyres to take us to the next level.

We have done a late entry in two-wheeler segment. But given the performance in other categories, which are in the truck category and passenger car, we have put a lot of technology behind two-wheelers. We have done 18-24 months of rigorous testing and until we have perfected the art of bringing out the product that’s when we launched these tyres.

What was the trigger for entering the two-wheeler segment?

I think there are two to three things that triggered this entry into the two-wheeler segment. Firstly, the dealers and customers have pushed us through in getting this tyre segment. The dealer fraternity and the business partner fraternity have been with Apollo since we started. Since two-wheeler is a growing market in India, it becomes a big piece of the pie for the dealer distribution network and, therefore, the dealer sees it also as a profit margin for themselves. Secondly, Apollo has created leadership in various product categories in India. Today, we have leadership in truck, we have one of the leaders in passenger cars and again we have been leaders in farm tyres. So this was one category that was missing out of the entire portfolio. And, therefore, Apollo Tyres took a decision two years ago that we need to get into two-wheelers. So it is more of a strategic rather than any of the analysis and the balance sheet numbers that you are asking for.

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