Currently, Apollo Tyres generates nearly 60% of its revenue from sales.

New Delhi: Apollo Tyres, headquartered in Gurgaon, which recently raised Rs 150 crore through a Qualified Institutional Sale (QIP) plans to deploy some resources to develop a new plant in India. Andhra Pradesh. Some of the funds will also be used to double the production capacity of the Chennai plant to strengthen its leadership position in the truck, bus, radial and passenger tire segments in the local market.

Kanwar, vice-chairman of Apollo Tyres, told The Economic Times that as the capacity expansion cycle comes to an end, the company will focus on expanding its presence in India and Europe through the organic route. But the next plan is organic. Today, capital and human resources are being utilized to build Hungary and develop the Andhra facility, and it is very important that we do not relinquish our leadership position in India.

Currently, Apollo Tyres generates nearly 60% of its revenue from the domestic market. The company plans to expand its presence in Europe and North America, but its revenue mix will continue to be skewed towards India going forward, Kanwar said.

“India is an important domestic market for us. Our vision in India is very clear and by 2020 2000, we want to be the first product category in which we operate. In Europe, we want to be a premium tire company. Be it product, price, brand or service levels, Apollo Tyres did confirm plans to invest Rs. 5.25 billion in a new plant in Andhra Pradesh, which is expected to start construction in 2019 and will eventually produce 5.5 million passenger car tires and tires. Truck and off-road tires will continue to be produced.

In Hungary, a similarly sized plant opened earlier this year with plans to increase production to 8,000 tires per year. As of March 2018, it was producing 16,000 tires per day, and 16,000 tires per day in September. Hyundai Motor Co, which mainly targets alternative markets in Europe, plans to strengthen its alliance to supply tires to automakers next year.

Overall, while raw material prices will put pressure on tire makers in the first half of the year, increased sales in October will lead to higher EBITDA margins in the second half of the year, Kanwal said. The government’s imposition of anti-dumping duty has helped curb Chinese imports, which is a positive for domestic manufacturers. But challenges remain.