Kanwar: European Apollo tyre sales to increase 30% by winter
Apollo Tyres’ managing director Neeraj Kanwar is expecting European aftermarket sales of its Apollo-branded tyres to grow to between 60,000 and 65,000 units a month by the winter season. According to an interview published in the India’s Hindu Business Line, the company is currently selling around 50,000 of these tyres a month in Germany, the Netherlands, the UK and Italy, meaning the proposed uptick in sales will be in the order of 20 – 30 per cent. According to the reports these figures are “over and above the sales of Vredestein branded tyres manufactured in Europe.”
However, while the sales figures represent strong growth, the firms says it is willing to play a long game and develop a position in the seasonal market: “We are not in a hurry to sell volumes. We are there to build a brand from India. Thankfully the customer feedback to our tyres is very good and we are slowly but steadily gaining ground,” Kanwar told the newspaper. Following the company’s launch into Europe during the middle of last year, Apollo reports that it generated European sales turnover of 5.5 million euros during the second half of 2010.
Kanwar also dismissed suggestion that Apollo would make Vredestein brand tyres in India. His argument was that it is more expensive than more think to produce in India and then ship to Europe: “Contrary to the popular perception, lack of infrastructure and very high cost of capital make manufacturing in India costlier than not merely China but even the emerging economies like Indonesia.” In his words the cost of labour around 6 – 7 per cent of the total production cost. Moreover, while wages are higher in Europe, lack of multi-skill in Indian labour force domestic industries to employ relatively high numbers of people compared with Europe.