Apollo Offered £20 Million From Hungary
It has been reported that Apollo Tyres was offered HUF 7 billion (£20.2 million) in incentives from Hungary’s government to secure the country as the base for the Indian tyremaker’s new factory. If accurate, this figure published in the Budapest Times is far less than the almost £70 million approved by the European Commission for Hankook in 2007. According to Hungarian prime minister Ferenc Gyurcsány, the Apollo subsidy equals about two-thirds of the Hankook subsidy per employee.
Groundbreaking for the first phase of construction at the Gyongyos site, near Budapest, is scheduled for April 13. Should the plant be granted the necessary regulatory clearances, production will begin 18-20 months later, reported Mr. Gyurcsány, who spoke with media after holding talks with Apollo Tyres management in New Delhi.
Major car manufacturers such as Suzuki and Audi operate factories in Hungary, and other firms are based in neighbouring countries; the proximity of such companies appears to have played a factor in the decision to locate the factory in Hungary. As previously reported, the facility will possess an annual capacity of seven million units, and sources in India say that Apollo is anticipating revenues of around £180 million in the factory’s second year of operation. According to Sunam Sarkar, head of strategy at Apollo Tyres, the plant will initially cater for the aftermarket segment, developing OE contracts at a later date. “We have excellent ties with Suzuki and General Motors here and would tap them,” he told India’s DNA Money. “Suzuki has a plant on Hungary and GM has plants in Europe. We would talk to them for supplies.”