Apollo Tyres bullish on Indian market

The company sells its products in 170 countries across the globe with India and Europe being the two major markets. The focus of building the brand is going to be in the US and the Middle East. This year, it would have done around $116 million in the US alone and its target is to get to $300 million by 2026

Budapest: Apollo Tyres is bullish on India, which is performing better than the rest of the world, and the company is making the country its export hub as it looks to expand further in the US and the Middle East, according to company's vice chairman and managing director Neeraj Kanwar.

The Indian tyre major, which has entered into mobility services business with the launch of its new venture 'AVOLVE' offering digitised tyre management services for commercial vehicles, sees contribution from exports and international business to increase to 45 per cent of its global revenue by 2025-26 by when it expects to clock $5 billion.

"I'm bullish on India. India is one of the world economies which is relatively better than the rest of the world...given the government spend on infrastructure the CV (commercial vehicles) cycle is back. It is on a positive growth. Even the passenger vehicles are back," Kanwar said.

However, in Europe the first half of the fiscal year is going to be difficult and challenging, he added. On the road ahead for Apollo Tyres, he said India is becoming an export hub for the company as it plans to further expand in the US and the Middle East besides other international markets.

"India, for us, is becoming an export hub. We're doing a lot in India, close to 1.5 million passenger car tyres are coming from India to Europe that will go on increasing as we have just put in a new greenfield (plant) in Andhra Pradesh," Kanwar said, adding at present main export is from the Chennai plant.

The company sells its products in 170 countries across the globe with India and Europe being the two major markets. "The focus of building the brand is going to be in these two new markets (US and the Middle East) - mainly in America where we are slowly increasing. This year, we would have done around $116 million in the US alone and our target is to get to $300 million by 2026," he said.

With increasing exports specially to America, Kanwar said, contribution from exports and international business will increase to 45 per cent of overall sales by FY26, up from 40 per cent, with domestic sales accounting for 60 per cent of the total.

In 2022-23, Apollo Tyres clocked consolidated revenue from operations of Rs 24,568 crore as against Rs 20,948 in 2021-22. He said digitalisation is one of the key five pillars of the company's target to achieve $5 billion and through the AVOLVE initiative.

"We're doing service orientation through digital app for our commercial vehicle customers, which is a brand new thing happening not only in India, in the world, where we are trying to do more service for the end user."

Through AVOLVE, the company is offering tailored tyre management services and management practices to large fleet operators. Apollo Tyres President Asia Pacific, Middle East and Africa, Satish Sharma said data from the pilot initiative of AVOLVE with around 1,600 trucks suggest that operational efficiencies of fleet operators increased by 10-15 per cent.

When asked about how big is the business opportunity for the new service, he said, "What our business plan has said is in five years time two lakh trucks (to be onboarded) and Rs 500-crore revenue from the service business."