Apollo in 4G mode

Apollo Tyres, which is gunning for a larger share of the Indian passenger car tyre market, has launched a trio of fourth-generation tyres. Nikhil Bhatia reports.



April 24 was a red-letter day for Apollo Tyres. The tyre manufacturer introduced its latest ‘4G’ (fourth-generation) range of tyres for the Indian market in Amsterdam, the Netherlands, to a contingent of over a 100 of Apollo’s business partners. Comprising of the Amazer 4G, Alnac 4G and Aspire 4G tyres, the 4G range of tyres is built to combine good dry and wet performance along with good braking and low noise. The company claims these characteristics arise from the tyre’s design that includes a wide shoulder with narrow intermediate grooves that enables maximum contact for dry handling, a stiff centre rib to aid steering precision and a mix of materials for best braking performance.

The Amazer 4G will cater to buyers of mini, compact and premium compact cars with tyre sizes ranging from 12-14 inches with a T-speed rating or standard performance. Higher up the order is the Alnac 4G for midsize and executive saloons and will be available as 15-inchers (H-rated or for speeds up to 210kph) and 16-inchers (V-rated for speeds up to 240kph). The range-topping Aspire 4G, available in the 16-17 inch size bracket, has been designed for the luxury car segment and carry a W-speed rating which makes the tyres capable of speeds up to 270kph. Interestingly, the Alnac 4G and Aspire 4G were introduced in the European tyre market at the Geneva Motor Show in 2012.

Treading into Europe
Apollo has been making inroads into the ultra-competitive European car tyre market with all-important positive reviews from customers and automotive publications doing their bit to boost sales. There is also great confidence within the company that there is a larger slice of the European car tyre market to be had. Much of this confidence stems from Apollo’s brand-new global R&D centre in Enschede in the Netherlands that was inaugurated in January this year. The R&D centre currently employs 85 specialists from Vredestein and 20 from Apollo India to develop tyres for the Apollo, Vredestein and Dunlop (Apollo has the rights to the Dunlop name in 32 African countries) brands.

The new R&D facility along with the Chennai plant that went on stream last year are firm steps taken by Apollo on its journey to break into the list of the top 10 tyre manufacturers in the world. Speaking about this, Satish Sharma, Chief, India Operations, Apollo, said: “We are increasingly being seen as a company to watch out for within trade circles. Our Chennai plant is our most ambitious step forward. We were confident that if not India, our plant would be servicing our demand from abroad. In the past, the trade unions and other factors have always deterred Indian manufacturers to think scale. There are plants which make 60,000 tyres a day, Chennai does only 16,000. In fact, our numbers say we need to put up two more greenfield facilities.’

Vredestein brand India-bound
Company executives also announced plans for the introduction of the Vredestein brand in India. The company will introduce its products in India in the third quarter of the calendar year though there are plans for a soft launch in June at the Buddh International Circuit. Apollo with its Vredestein brand is serious about positioning itself against premium brands like Michelin, Bridgestone and Pirelli and in that light will start its Indian operations with the import of its ultra-high-performance tyres.

The range will include the V-rated Sportrac 5, Y-rated Ultrac Cento and the Y-rated UltracSessanta and Ultra Sessanta SUV tyres. While prices have not been finalised yet, Apollo has confirmed its initial focus will be in the Tier 1 and Tier 2 cities only. At present, Vredestein’s presence in India is restricted to official tyre partner for the Audi Driving Experience held at the Buddh Circuit.

INTERVIEW WITH SATISH SHARMA, CHIEF, INDIA OPERATIONS, APOLLO TYRES


What's your outlook for FY14?
This year, revenue growth has not been that good but there is some bullishness about the market. Inflation is under control, gold prices are falling and crude prices have fallen. All these factors give us the feeling that interest rates will come down. Specific to our industry, the Supreme Court has ordered mines to reopen in Karnataka. We have also worked on our sales infrastructure in the Asia-Pacific region. So we expect these steps of engaging more directly with the market to help us.

What is your view on Apollo being ranked fourth in the 2013 JD Power India Original Equipment Tyre Customer Satisfaction Index study?
We do not see the JD Power results as a barometer of our quality process. We have been selected as tyre suppliers for the Volkswagen Passat globally. We have also been able to meet all criteria for Ford’s Q certification and we are in talks to supply tyres for the upcoming EcoSport, Figo and Fusion in the ASEAN and Latin American markets. We are also working with Toyota on the new Innova and Fortuner that will be introduced in 2014. This is perhaps the best customer acknowledgement on where you stand on the global quality front. As a manufacturer, we are also working towards the Deming Award in 2016.

Input prices remain a challenge for the tyre industry. Is there any solution in sight?
The main problem is with the inverted duty structure. The raw material is imported at a higher duty structure than the finished goods. The government has corrected this for many industries but as rubber is an agricultural product, the government needs to address other stakeholders as well. For us, the bigger issue is with the quality of the Indian rubber. Because it comes from fragmented sources, it collects a lot of foreign material over the entire process. This makes it difficult to use. Hence, for our truck and bus tyres where natural rubber comprises nearly all the input, we are forced to import the raw material, irrespective of market rates.

Where do the majority of Apollo’s sales come from?
In the commercial vehicle tyre segment, we are in a dominant position with a 30 percent share of the market.We are well entrenched with 157 sales offices across India. In passenger vehicles, our share is the region of 17 percent. In the passenger car tyre space, we sell more in Tier 2 towns than the metros. Being a new entrant in this segment, this was part of our strategy. We are working on Tier 1 towns as well but that will obviously take some time. Having gained 4 percent market share in the last year alone, we do have the momentum and also the products.