Apollo Tyres eyes China
Having planted its feet in almost all major markets, domestic tyre major Apollo Tyres is now working on a strategy to enter China, which is the world's largest tyre pro- ducer, exporter and also a major consumer.business Updated: Jun 07, 2010 18:57 IST
Having planted its feet in almost all major markets, domestic tyre major Apollo Tyres is now working on a strategy to enter China, which is the world's largest tyre pro- ducer, exporter and also a major consumer.
So far, no Indian tyre company is present in China largely due to the over-capacity there and lack of trans- parency in regulations.
“We aim to be a global tyre producer with footprints in all corners of the world,“ said Onkar Kanwar, chairman, Apollo Tyres at the launch of the brand in Europe. “With our entry here, we are now present in Asia, the Pacific region, Europe, Africa (through Dunlop), and America (Vredestein). Only China is out of bounds right now but we will chart a strategy to be present there as well, through either a joint venture or a contract man- ufacturing arrangement.“
China, which has a produc- tion capacity of over 600 million tyres, has always been dogged by allegations of dump- ing. Last September, the US government imposed punitive safeguard duties for three years against Chinese tyre imports.
India, too, imposed anti-dump- ing duty on Chinese truck and bus radials in February.
“China is a difficult market to operate in as the procedures are not clear and the capacity there is huge,“ said Sunam Sarkar, chief financial officer, Apollo Tyres. “But a market this big and growing so strongly can- not be left untouched.“
Apollo's presence in the US through Vredestein is also minuscule, but the company said it will rather focus on growth markets like Latin America and Africa.
“We will grow organically (through capacity addition) as well as inorganically (acquisi- tions) and are looking for tar- gets in Africa and Latin America,“ Kanwar said. “The US market itself is in a down- turn and margins are wafer thin. It is also one of the most challenging markets due to its product liability clauses."
First Published: Jun 07, 2010 18:55 IST