Apollo Tyres shifts focus to larger tyre sizes in response to SUV demand

Apollo Tyres, a prominent tyre supplier in the automotive sector, is strategically redirecting its attention towards tyre sizes of 14 inches and above. This decision is a direct response to the surging demand for sports utility vehicles (SUVs), which has led to a noticeable shift in the market's preference for larger-sized tyres. 

The shift in focus is also driven by the fact that smaller tyre sizes, such as 12 or 13 inches, do not offer significant profit margins. Gaurav Kumar, the Chief Financial Officer, emphasised this during a post-result investor call, stating, "So, we are focusing on 14 inches and above."

Kumar further highlighted the visible trends in tyre volume sales, noting that around 15 years ago, 12-inch tyres accounted for approximately 30% of volume sales. However, the situation started to change about 7–10 years ago, with 13-inch tyres surpassing 12-inch tyres and capturing 30% of the volume share. Currently, 14-inch tyres constitute around 30% of the total volumes, indicating a further shift in preference. Furthermore, there has been a slight improvement in demand for 16–17-inch tyres, which now represent approximately 5% of total volume sales.