While Apollo Tyres tried unsuccessfully to purchase US based Cooper Tyre & Rubber for US$ 2.5 billion, the company has moved on and furthered their investment plans in US markets.
Apollo Tyres will be investing $400 million over the next couple of years to reduce its dependency on domestic markets. The company also has to contend with competition from cheap replacement tyre imports from China that increased 60% in the last fiscal.
Besides investment plans in the US, Apollo Tyres also targets increased revenues outside the country to increase from a current 35% to 40% in the next five years. By 2020, the company seeks to double its sales in Europe and ASEAN countries while a new plant in Hungary is in the offing at an investment of €475 million ($540 million) which is set to commence production in 2017. This upcoming plant in Hungary will allow Apollo Tyres better cost competitiveness in its US sales.
Building up a team to enable sales across the US, Apollo Tyres also plans on initiating supplies to automakers across Europe that include Volkswagen AG, Daimler AG and Suzuki Motors all of which have their manufacturing units close to the Apollo Tyres plant in Hungary.
Besides expansion plans overseas, Apollo Tyres plans for India includes increased capacity at its plant in Chennai. Investments to the tune of INR 2,700 crores are being planned at the company’s Chennai plant over the next three to four years which will enable two fold increase in production.