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Apollo Tyres Planning to Open New Manufacturing Facility in India

Apollo Tyres to set-up new manufacturing facility for pick-ups and two-wheeler tire production

India: Apollo Tyres is planning to set-up new production facility, with an investment of USD75.20 million for manufacturing pick-up vehicle and two-wheeler tires in Andhra Pradesh. The company’s Vice-Chairman and Managing Director, Neeraj Kanwar, said that the company will produce tires for pick-up vehicles and two-wheelers at the planned facility, which were earlier being produced at some third-party manufacturing unit, on company’s behalf.

The company wants to increase the sales substantially by the end of this year, from the current sales of 200,000 tires a month. The Vice-Chairman and Managing Director further added that the demand for tires increased in commercial vehicle industry during October and November 2016, after witnessing a drop in the second quarter of 2016, which is consequently a good sign for the industry to grow during third and fourth quarters of 2016.

The company already operates a huge manufacturing facility at Oragadam, near Chennai, where Apollo manufacture bus and passenger car radial tires.  Apollo Tyres have a total production capacity of 32,000 passenger car tires a day, across its plants and is adding 3,000 tires in Baroda.

The company invested USD315.82 million in Chennai and is planning to invest USD406.05 million further, for expansion of truck bus radial tire capacity from 6,000 tires to 12,000 tires, as quoted by Satish Sharma, President - Asia Pacific, Middle East and Africa, Apollo Tyres.

As per TechSci Research, the step taken by Apollo Tyres will assist the company to cater the emerging demand for tires in the country’s replacement market through capacity enhancement, along with providing more options to customer, to choose among the available brands and models. Further, the decision made by Apollo is expected to assist the company to establish itself on a strong position in the Indian tire market in coming years.

According to a recent report published by TechSci Research, “India Tire Market Forecast & Opportunities, 2021”, 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. In 2015, Northern region accounted for the largest share in India’s tire market, followed by Southern, Eastern and Western regions of the country. Over the next five years as well, Northern and Southern regions are forecast to continue their market dominance and grab a cumulative market share of nearly 59% in 2021. Two-wheeler tire segment, which accounted for a volume share of over 50% in the country’s tire market in 2015, is also expected to maintain its position as the largest tire segment over the next five years.

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