Apollo Tyres looks at expanding business in the United States
Published On 04-Jun-2016 00:17:54
Indian tyre manufacturer Apollo Tyres is busy hiring a sales team to expand its business in the United States. Two years ago, the company failed to acquire US-based Cooper Tire & Rubber for $2.5 billion. Apollo's bid for Cooper didn't go through due to legal battles. Therefore, the company has to do a lot of work to expand its business in the US, which otherwise would have been easier if the Cooper deal had been successful.
Apollo's vision to become a global brand is also to reduce its dependency on the domestic market where the vehicle sales are recovering after a down turn. The company plans to invest $400 million over the next 3-4 years.
Apollo Tyres is the second largest tyre manufacturer in India but it also faces threat from the growing competition from the replacement tyres imported from China.
According to the industry data, tyre imports from China have increased by 60 per cent in the financial year ending March 31, 2014.
Gaurav Kumar, Chief Financial Officer, Apollo Tyres said, "We are now looking at the US market through organic growth lens." Kumar added that by 2020, Apollo's revenues outside of India are expected to rise to 40 per cent from about 35 per cent today, as it expects to double its sales from Europe and ASEAN (Association of South East Asian Nations) over the period.
After the Cooper deal collapsed in 2014, the company said that it would invest $540 million to build a manufacturing plant in Hungary. The plant is expected to become operational in 2017.
The company confirmed that it has plans to become OE supplier to the car makers operating in Europe like Volkswagen AG, Suzuki Motor Corp and Daimler AG that have their manufacturing facility close to Apollo's upcoming Hungary plant.