Apollo Tyres to up its replacement play with launch of Vredestein tyres

G Balachandar Chennai | Updated on November 23, 2020

Neeraj Kanwar, Vice-Chairman & Managing Director of Apollo Tyres   -  PTI

Satish Sharma, President, Asia Pacific, Middle East & Africa, Apollo Tyres

Ramps up network, AP production capacity

Apollo Tyres is planning to launch its Vredestein tyre brand in January 2021, targeted at premium cars in the replacement segment.

The company, in 2016, announced its plans to introduce the Vredestein brand, which has a legacy of more than 110 years in Europe, for luxury cars in India. But it couldn’t proceed aggressively as the company had made some mistakes in that strategy, said Neeraj Kanwar, Vice Chairman & Managing Director of Apollo Tyres.

But now the company sees a favourable opportunity to sell ‘Made in India’ Vredestein tyres for Mercedes, BMW and others premium sedans, the requirements of which are currently met through imports.

Also read: Apollo Tyres Q2 net profit more than doubles to ₹200 crore

“We have been working for quite some time now on the introduction of the Vredestein brand of tyres in India, especially for the top-end cars. Vredestein, as you would know, is a premium top-of-the-line brand in Europe. With the Indian government restricting the imports of tyres for such cars early this year, we are looking at capitalising on this opportunity by bringing in the Vredestein brand,” Satish Sharma, President, Asia Pacific, Middle East & Africa (APMEA), Apollo Tyres, told BusinessLine.

The market for the top-end segment, which is tyre sizes of 17 inches and above, would be less than 10 per cent of the overall tyre market. But Apollo sees this as a growing and a high-margin segment.

New radial tyres

The company launched its bike radial tyres during the second quarter of this fiscal and has been witnessing positive signs in the marketplace with the possibility of being a profitable business. It has also launched light truck radial tyres due to increasing demand in this segment.

Sharma said the production capacity at its Andhra Pradesh plant was being ramped up in view of improving demand for passenger car and truck-bus tyres. The current phase of the AP plant would reach its terminal capacity of 15,000 passenger car tyres and 3,000 truck-bus radials by the end of next year.

On the overall growth outlook in the replacement segment, Sharma said Apollo Tyres has been witnessing strong demand in all categories in the last few months, with some segments recording best-ever sales in the replacement market.

“While demand across categories has been robust in the second quarter, and we are bullish about demand being at similar levels in Q3 as well, it is difficult to provide an outlook for the fourth quarter due to the uncertain environment,” he added.

Also read: Tyre-makers get a breather as replacement demand revives

The replacement segment contributed about 75 per cent to the company’s domestic revenue in this September quarter, up from 67 per cent a year ago.

The company has also ramped up the dealer network with the addition of about 350 new dealers across the country. With the rural economy spurring demand across segments, it has doubled its rural touchpoints to 4,000 now from 2,000 earlier.

Published on November 23, 2020

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