Chairman and Vice Chairman lead with a 25% reduction in their salary
Apollo Tyres's Leadership Team today announced a voluntary reduction in pay owing to the impact of COVID-19 on the automotive and tyre industry. The Chairman and Managing Director, Onkar S Kanwar and the Vice Chairman & MD, Neeraj Kanwar announced that both of them have decided to reduce their salary's by 25% during these tough, testing times. Following the announcement, the Senior Management too followed suit and announced a voluntary reduction in their salary by 15% in a show of solidarity with the company leadership.
The tyre company has a diversified and multinational presence and thus, the pay cuts will affect all senior management at the global level. Coronavirus is impacting sales and profitability across the automotive and tyre industry as anticipation builds that the worst is yet to come with COVID-19.
Italy overtook China on the 20th with regard to number of deaths due to the coronavirus while France recorded more than a hundred deaths in one single day. The pandemic is currently wreaking havoc in Europe and almost all major tyre and auto manufacturers have had to shut their factories.
For Apollo tyres, Europe accounts for a significant 32% and 16% of consolidated revenue and profit respectively. Europe remains one of the worst effected areas as things stand, and with the auto industry, tyre production as well as tyre demand coming to a standstill, Apollo's revenue and sales in Europe are bound to take a big hit, at least in the near term.
A few days back shares of Apollo Tyres Ltd fell 21% to a six-year low at the backdrop of rising chaos in Europe and the Hungarian Prime Minister's economic warning.
Things don't look great in India as well. Total vehicle sales in India dropped to 1,646,332 in February 2020, down 19.08 per cent from 2,034,597 units registered in the same month a year ago. Weak customer sentiments, a steep rise in prices for BS-VI compliant vehicles along with the added disruption caused by COVID-19 have severely impacted the performance of domestic auto and tyre industry.
Furthermore, with trucks being the largest segment in the replacement market in India, a sluggish economy and lockdowns might continue to force fleet operators to lower capacity utilisation thereby keeping demand muted in the replacement market as well.
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Commenting on this, Onkar S Kanwar, Chairman and Managing Director, Apollo Tyres Ltd said, “This is an incredibly difficult time for our employees and their families. We are in unchartered waters but as ‘One Family’ we will work together and make the necessary sacrifices to steer Apollo Tyres in the right direction, to overcome this period. We are experiencing slowing demand and disrupted supply chains due to COVID-19. We are working on further measures which we will provide updates on, as we make final decisions.”
About Apollo Tyres: Standing firm as the leading manufacturers of tyres since the day of its inception in 1972, Apollo is a trusted name in the Indian tyre market. Headquartered in Gurgaon, India, the company with humble roots has now risen to serve almost 100 countries across the globe including the likes of Hungary and Netherlands. Apollo tyres is a renowned name in the automotive sector offering tyres with outstanding braking ability along with high stability and precision running. The company sells its tyres under two names - Apollo and Vredestein. As a leader in the tyre industry, Apollo considers vehicle safety and customer satisfaction as its top- most priorities.
