Apollo Tyres to Double Truck & Bus Tire Production Capacity, Invests USD448 Million

India: Leading global tire manufacturer Apollo Tyres Ltd. is all set to double its manufacturing capacity for truck and bus radial tires in their plant located in Chennai. The expected investment for this expansion is USD448 million approximately.

The strategic move of Apollo Tyres for expansion of its production capacity is a result of challenges posed by Chinese tires which are available at comparatively lower price and account for a strong market share in the Indian truck & bus tire market.

Once fully operational, the production capacity of the Chennai plant is expected to increase from 6,000 tires per day to about 12,000 truck & bus radial tires per day. However, as per the first phase of expansion, the company is poised to invest USD403 million which is likely to be completed by October this year. The Chennai facility will produce tires for both Apollo and Vredestein brands.

"Today we have competition from all the multi-nationals - Goodyear, Bridgestone, Continental etc. So there is competition. You have to fight that competition but you cannot fight a competition which is not in market economy. Unfortunately, Chinese (are) not a market economy. The capacity will then be gradually ramped up over the next few years. Once ready, this facility will have capacity to produce 5.5 million passenger car and light truck and 6,75,000 heavy commercial vehicle tires” said Onkar S Kanwar, Chairman, Apollo Tyres Ltd.

As per TechSci Research, with expansion of production capacity for truck & bus radial tires, the company is expected to enlarge its consumer base in the country majorly in the commercial vehicle tire segment. Further, with increased capacity, the market share of the company is expected to increase in the tire market of India.

According to a recent report published by TechSci Research, “India Tire Market Forecast & Opportunities, 2021’’, with more than 60 tire manufacturing plants spread across the country in 2015, India ranks among one of the largest tire markets in the world. Growing automobile sales coupled with expanding automobile fleet are the major factors boosting demand for tires in the country. Presence of major automotive OEMs such as Ford, Hyundai, Honda, Mahindra, Maruti Suzuki, TATA, BMW, etc. has been hugely contributing to the sales of tires in India. MRF, CEAT, Birla Tyres, TVS Srichakra, Apollo Tyres and JK Tyre are few of the major regional tire manufacturers. The country’s tire market is forecast to witness a CAGR of over 9% during 2016-2021. Though the replacement tire demand had a majority share in 2015, the OEM tire demand is expected to outpace replacement tire demand during 2016-2021.