Apollo Tires acquired the Netherlands-based premium tire manufacturer in 2009 to enter the European market. But the company has not introduced the brand in India given the low volumes in the high-end segment and the market dominance of European tire manufacturers.
However, given the strong growth in the luxury and performance car markets in recent years and the regulatory tailwind of import restrictions, the company believes the time has come to introduce the brand in India, according to Satish Sharma, president – APMEA, Apollo Tires.
The company will also soon launch premium motorcycle tires under the Dutch brand in India – a first for Vredestein in the world, which mainly focuses on car and bicycle tires.
“We launched Apollo quite early in Europe, but bringing Vredestein to India was not an option until now. But now the market is right, ”Sharma told ET.
The Indian government placed the import of tires in the restricted category in June last year and companies are allowed to import only tires that are not manufactured locally. With Apollo Tires ready to manufacture Vredestein tires locally, the company will have an advantage, Sharma said.
The company targets 30-40% of the premium tire aftermarket in India. Since automakers like Mercedes and BMW have global tire ties, it would be difficult for the company to break into the factory-fitted tire segment. The company is in talks with BMW and Jaguar Land Rover, according to Sharma.
While entering the new segments does not generate significant revenue initially, it will help the company test the two-brand strategy, showcase its technology, and lay the groundwork for future growth in these segments, said Sharma.
With that, the company was on track to meet its goal of $ 5 billion in revenue by FY26 (Rs 37,500 crore), Sharma said. In fiscal year 21, the company reported a consolidated turnover of Rs 16,955 crore. The company expects about 15% of this amount to come from exports.
However, with the rise in commodity prices, the margins of Apollo Tires and other tire manufacturers have come under pressure as they have not been able to pass on the full increase in prices. costs to consumers.
Apollo Tires stock closed at Rs 221.2 on BSE on Friday after falling 2.17%.