India's leading tyre manufacturer Apollo Tyres yesterday opened its first regional office for the Middle East in Dubai with a target of Dh365 million sales in a year, a top official said.
Apollo opened its first and largest office outside India at the Jebel Ali Free Zone with a warehouse.
"We plan to triple sales to roughly $250-$300 million in the next three to five years," Satish Sharma, Apollo Tyre's Chief, India Operations, told Gulf News.
"The Middle East is our biggest export market, representing about 30-40 per cent of our export earnings.
The equity of our brand is much ahead of its availability in the market.
"The move will help us to strengthen our position in the market and help penetrate deeper into the market."
The company has invested $250,000 in the set up with potential annual investment to exceed $1.5 million.
"This is a high potential market, where the Dubai tyre distribution and re-export trade is valued at $1.5 billion (Dh5.5 billion), and expected to grow at 30 per cent in the next five years," Sharma said.
"In that time frame I am looking at Apollo garnering a high single digit, If not 10 per cent of this market share."
Established in 1976, Apollo Tyres quadrupled its annual turnover of $500 million in 2005 to $2 billion in the last financial year ending March 2011 growing at 20 per cent per annum against an industry average growth of 10 per cent in India.
It's products include the entire range of passenger car, SUV, MUV, light truck, truck-bus, agriculture, industrial, speciality, bicycle and off-the-road tyres; retreading material and tyres, and alloy wheels.
India is Apollo's largest market accounting for 62 per cent of revenues followed by Europe with 25 per cent and South Africa with 13 per cent, exporting to more than 70 countries from India, Europe and South Africa.
The Indian truck and bus tyre market witnessed a total production of 15.6 million units in 2010-11, as per the Automotive Tyre Manufacturers Association (ATMA). Indian market is dominated by the likes of Apollo Tyres, MRF and JK Tyres.
India's economic growth, coupled with the expansion of its middle class, is creating demand for greater mobility.
As a result, car and vehicle manufacturers are racing against time to catch up with demand. This is reflected in tyre production.
Tyre manufacturing jumped 28 per cent in 2010-2011 financial year ending March 31, 2011 to 57.2 million units, up from 44.63 million units in 2009-2010 financial year, according to ATMA statistics. While tyres for scooters jumped 59 per cent, passenger car tyre production increased by 41 per cent. Of this, 12.54 million tyres are for passenger car segment.
Side by side, tyre export also grew 18 per cent during the period, rising to 2.91 million units, up from 2.48 units, ATMA says.
India has 36 registered tyre manufacturers. However, 10 top manufacturers control about 98 per cent of the market.
In 2009-10 financial year, total industry turnover reached Rs250 billion, of which Rs36.25 billion came from exports.
"This is part of our plan to raise our annual turnover to $6 billion in the next five years, which will bring us next to the world's top ten tyre manufacturers," he said.
The company is currently ranked second in terms of total turnover in the Indian market, which is valued at $20 billion.
However, it is positioned 17th in the global automobile tyre market worth $130 billion dominated by the western brands such as Michelin, Bridgestone, Good Year, Continental and Pirelli who collectively control about 60 per cent of the global tyre market.
The company, which has 16,000 employees across India, Southern Africa and Europe, runs seven production plants including four in India, two in South Africa and one in Europe.
Its daily production cap-acity has touched 1,540 tonnes. Its four plants in India have a daily production capacity of around 1,180 tonnes.
Apollo has made two acquisitions in the last five years.
From / Gulf News