News: Volkswagen may roll out on Apollo tyres

(BS 04/12/2006) Mumbai - Gurgaon-based premium tyre manufacturer Apollo Tyres is in talks with German car major Volkswagen for supplying tyres to the proposed small car that it will launch in the next two years.

Onkar Kanwar, chairman and managing director, Apollo Tyres, said, "We are holding talks for supply of car radials for Volkswagen vehicles, which are expected to roll out in the second half of 2009-10".

Apollo's new passenger and truck-bus radial factory, which is scheduled to come up in Tamil Nadu in the next five years, will make the company self-sufficient to cater to the demand from Volkswagen and also from the open market.

Volkswagen had firmed up its plans to set up a car plant in Chakan near Pune and is expected to sign a memorandum of understanding (MoU) with the Maharashtra government by the next week.

Apollo Tyres' share of sales to Original Equipment Manufacturer (OEM), such as car companies, is 30 per cent and remaining through sales to car owners, better known as after market sales.

Kanwar said though better margin comes after market sales, the company is expecting OEM sales to go up to 35 per cent.

Meanwhile, to strengthen its position, the company is also eyeing acquisitions in domestic and international markets, especially Europe where it is going to launch its premium tyres next year.

"Apollo Tyres is all set to cross the $1 billion mark in consolidated revenues in the current financial year," Kanwar said.

Currently, 85 per cent of Apollo's revenue is derived from domestic sales but the company aims to increase its export share in the next five years.