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    Apollo Tyres to launch premium brand Vredestein in India

    Synopsis

    The government of India put the import of tyres in the restricted category in June last year and companies are licensed to import only those tyres which are not manufactured locally. With Apollo Tyres set to manufacture Vredestein tyres locally, the company will have an advantage, said Satish Sharma, President - APMEA, Apollo Tyres.

    Apollo Tyres to launch premium brand Vredestein in IndiaAgencies
    The company is eyeing 30-40% of the premium tyre aftermarket in India. (Image: apollotyres.com)
    With India’s restrictions on the import of tyres impacting the business of dominant premium brands, Apollo Tyres is using it as an opportunity to introduce its European brand Vredestein in the country over a decade after acquiring it.

    Apollo Tyres acquired the Netherlands-based premium tyre maker in 2009 to enter the European market. But the company did not introduce the brand in India given the small volumes in the premium segment and the market dominance of European tyre makers.

    However, given the high growth in the luxury and performance car markets in recent years and the regulatory tailwind from restrictions on imports, the company feels now is the right time to bring the brand to India, according to Satish Sharma, President - APMEA, Apollo Tyres.

    The company will also soon launch premium motorcycle tyres under the Dutch brand in India - a first for Vredestein globally which primarily focuses on car and bicycle tyres.

    “We launched Apollo early enough in Europe but getting Vredestein to India was not on the cards up until now. But now the market is right,” Sharma told ET.

    The government of India put the import of tyres in the restricted category in June last year and companies are licensed to import only those tyres which are not manufactured locally. With Apollo Tyres set to manufacture Vredestein tyres locally, the company will have an advantage, Sharma said.

    The company is eyeing 30-40% of the premium tyre aftermarket in India. Given automakers like Mercedes and BMW have global tie-ups for tyres, it would be difficult for the company to break into the factory-fitted tyres segment. The company is in talks with BMW and Jaguar Land Rover, according to Sharma.

    While the entry into the new segments will not be significant revenue accretive initially, it will help the company test the two-brand strategy, showcase its technology and lay a foundation for growth in these segments in the future, Sharma said.

    With this, the company was on track to achieve its target of $5 billion revenue by FY26 (Rs 37,500 crore), Sharma said. In FY21, the company reported a consolidated topline of Rs 16,955 crore. The company expects about 15% of this to come from exports.

    With the growing commodity prices, however, margins have come under pressure for Apollo Tyres and other tyre makers as they were unable to pass on the entire cost increase to consumers.

    The stock of Apollo Tyres closed at Rs 221.2 on the BSE on Friday after declining 2.17%.


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