Apollo Tyres to Double Truck & Bus Tire Production Capacity, Invests USD448 Million
India: Leading
global tire manufacturer Apollo Tyres Ltd. is all set to double its manufacturing
capacity for truck and bus radial tires in their plant located in Chennai. The
expected investment for this expansion is USD448 million approximately.
The strategic move of Apollo Tyres for
expansion of its production capacity is a result of challenges posed by Chinese
tires which are available at comparatively lower price and account for a strong
market share in the Indian truck & bus tire market.
Once fully operational, the production
capacity of the Chennai plant is expected to increase from 6,000 tires per day
to about 12,000 truck & bus radial tires per day. However, as per the first
phase of expansion, the company is poised to invest USD403 million which is likely
to be completed by October this year. The Chennai facility will produce tires
for both Apollo and Vredestein brands.
"Today we have competition from all the
multi-nationals - Goodyear, Bridgestone, Continental etc. So there is
competition. You have to fight that competition but you cannot fight a competition
which is not in market economy. Unfortunately, Chinese (are) not a market
economy. The capacity will then be gradually ramped up over the next few years.
Once ready, this facility will have capacity to produce 5.5 million passenger
car and light truck and 6,75,000 heavy commercial vehicle tires” said Onkar S
Kanwar, Chairman, Apollo Tyres Ltd.
As
per TechSci Research, with expansion of production capacity for truck & bus
radial tires, the company is expected to enlarge its consumer base in the country
majorly in the commercial vehicle tire segment. Further, with increased
capacity, the market share of the company is expected to increase in the tire
market of India.
According to a recent report published by TechSci Research, “India
Tire Market Forecast & Opportunities, 2021’’, with more than 60 tire manufacturing plants spread across the country
in 2015, India ranks among one of the largest tire markets in the world.
Growing automobile sales coupled with expanding automobile fleet are the major
factors boosting demand for tires in the country. Presence of major automotive
OEMs such as Ford, Hyundai, Honda, Mahindra, Maruti Suzuki, TATA, BMW, etc. has
been hugely contributing to the sales of tires in India. MRF, CEAT, Birla
Tyres, TVS Srichakra, Apollo Tyres and JK Tyre are few of the major regional
tire manufacturers. The country’s tire market is forecast to witness a CAGR of
over 9% during 2016-2021. Though the replacement tire demand had a majority
share in 2015, the OEM tire demand is expected to outpace replacement tire
demand during 2016-2021.