Chairman of Apollo Tyres Onkar Kanwar has reached out to the Indian government to take action against the flow of low-cost imported tyres into the country. According to Onkar Kanwar, import of truck/bus radials has nearly doubled in the three months that ended on 30th September 2015 as compared to the same period last year. The economy tyre brands, mainly from China, account for nearly 90 per cent of the imports.
“The problem of low-cost imports is putting at risk the entire ‘Make in India’ clarion call by the Indian government,” Kanwar said in the financial update issued on October 30.
Apollo Tyres said that despite the increasing competition from the low-cost imported tyres, it is able to maintain revenues for the second quarter and the first six months of its 2015-16 financial year as compared to their last financial year.
The company recorded lower sales in its domestic operations. However, the mild weather in Europe resulted in expected sales and pre-orders for the winter tyres in the European region.
In the recently released Q2 report of the company, net profit was Rs 279 crore. The manufacturer saw an increase of 8 per cent in its profit despite 10.5 per cent drop in net sales. The H1 financials show that profits increased by 17 per cent but the sales were 11 per cent lower.
The increased profit despite lower sales might be due to the reduced raw material cost and higher margins. In order to benefit from the global tyre demands, the company is also investing heavily to expand its international operations. Apollo Tyres is considering to set up a plant in one of the given countries – Indonesia, Vietnam or Thailand. According to Satish Sharma, the new manufacturing unit in Asia will have big capacity and big economies of scale.