Apollo Tyres targets higher growth from rural India with expanded distribution network

With growing consumer aspiration, disposable income as well as sale of larger cars and SUVs across town and country, the tyre manufacturer plans to expand its distribution channel by focusing on regions in states like Rajasthan, Uttar Pradesh and Madhya Pradesh, among others. 

By Mayank Dhingra calendar 06 Feb 2024 Views icon7158 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Apollo Tyres targets higher growth from rural India with expanded distribution network

Apollo Tyres, which commands a fourth of India’s passenger-car radial segment in the aftermarket, is looking to expand its rural footprint in the country. The Gurugram-headquartered company states that it is witnessing higher growth from India’s hinterlands and is, therefore, strengthening its presence in these markets which include Rajasthan, Uttar Pradesh and Madhya Pradesh.

At present, the company has a strong all-India reach with over 20,000 touchpoints by virtue of its deep relationships with branded- and multi-brand outlets, as well as distributors that make its expansive range of two-wheeler, passenger car radial (PCR), and truck-and-bus radial (TBR) tyres, accessible to a large segment of India’s population.

“While we are well covered in metros, and smaller towns, rural is always a fast-growing market as an opportunity, and we must get deeper into the rural market. Therefore, there is a plan in place to strengthen our rural presence,” Vikram Garga, Group Head, Marketing, APMEA, Apollo Tyres, told Autocar Professional.

“Our plan is to be there in every possible village with a 50,000-and-below population size, and be at the arm’s length of the consumer, enabling them to easily buy an Apollo Tyres product. While that is our current plan, we might go down to a population-size level of 20,000, or, eventually to even 5,000 at some point,” he said, while speaking on the sidelines of the Bharat Mobility Show in New Delhi held last week.

Prime Minister Narendra Modi visited the Apollo Tyres pavilion at the Bharat Mobility Show 2024 held in the first week of February in New Delhi.
Photo: PIB

Looking to tap growing demand for radials from rural India

Garga explained that the key factors driving this strong rural demand are the higher disposable incomes, as well as growing consumer aspirations in these markets that are giving a fillip to the sales of not just two-wheelers, but also more cars in the Indian hinterlands. “The aspirations of a rural customer are growing rapidly. Customers in rural India are increasingly becoming more tech-savvy, and are aspiring to own bigger cars, as well as the latest gadgets and appliances, as in urban households,” he said.

This pull as well as the rapid premiumisation of India’s passenger vehicle market are collectively enabling a strong growth for the 15-inch-and-above PCR category in the aftermarket, not just in bigger Indian cities, but in smaller towns as well. “With one in two cars sold being an SUV, and most of them belonging to the entry-level- and compact-SUV segment, a lot of the volumes are coming from the 15-to-17-inch size range. Therefore, our business is going up in this category significantly,” Garga added.

“We have a clearly laid-out strategy in terms of our brand’s availability across the country. We have a focused approach of working where the potential, with respect to our distribution, is. Rural will play a big role and it is an area that we must really explore,” Garga pointed out, while explaining that markets in South India, as well as regions in States like Rajasthan, Uttar Pradesh, and Madhya Pradesh, are some of the key rural markets where it is eyeing to step up its distribution.

Apollo Tyres opened a Vredestein store in Bhopal in October 2023. 

Fifty dedicated-Vredestein stores by March 2026
Apollo Tyres, which observes a near-equal distribution of business between OEM and aftermarket supplies, says its range of sustainable offerings is growing consistently. In the premium end of the market, its Vredestein brand, introduced in India in 2021, is catering to the luxury car segment in the country. Apollo Tyres had acquired the Netherlands-based tyre maker in 2009.

“We are currently registering triple-digit growth with Vredestein (due to a small base); the volumes are growing strongly on a month-on-month basis. We have some ambitious plans for Vredestein for the domestic market, and now that we locally manufacture these tyres in India, it would be important for us to keep the momentum going to build the Vredestein brand in the country,” Garga said.

While the company is presently witnessing a larger proportion of shop-in-shop sales for Vredestein products from its existing branded- and multi-brand retail partners, it has so far opened dedicated-Vredestein stores in Bengaluru, Bhopal, and Chandigarh.

“We plan to reach 50 exclusive-Vredestein outlets by end-FY2026. These stores will cater to the high-end premium customers, and we want to offer them a completely different experience. Vredestein will continue to grow faster than Apollo Tyres, and register growth in high-double-digits over the next three years. The growth will moderate once we have a larger base,” Garga concluded.

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