Leading global tyre manufacturer, Apollo Tyres, is planning to introduce the European subsidiary tyre brand of Apollo Tyres Ltd.- Vredestein tyres in India, earliest by 2021. Vredestein was acquired by Apollo Tyres Ltd. in the year 2009 with an undisclosed sum of money. The Vredestein tyres are currently sold in Europe, the US, the Middle East, Africa and a few Asian countries.
In 2013, Apollo Tyres had introduced the Vredestein tyre brand for a trial run in the Indian market as a pilot project. However, the response was limited which made the company postpone the launch further.
However, the company sees growth in the sales of performance and luxury cars and the restriction on imported tyres is seen as the best possible time for the tyre maker to manufacture tyres locally in the country.
Apollo Tyres Vice Chairman and Managing Director Neeraj Kanwar mentioned: "We have seen the opportunity of launching our Vredestein brand in India. We did try it four, five years ago and we basically made our own mistakes over there. So the month of January is when the Indian marketing team is looking at launching Vredestein into the Indian replacement market, because that higher segment of the market also has a mentality of having a foreign branded tyre on their car."
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Kanwar added that the company has the best equipment in India to manufacture the high-end tyres: "When I say high-end tyres, I'm talking about 17 inch up to 24 inch," he noted
Further, Kanwar mentions about the company's investment plans. He said the company is towards the end of its current capex cycle. "Going forward, the focus would be on sweating the assets and deleveraging the balance sheet. We expect the capex intensity to come down in the next few years, which coupled with recovery in demand should help us generate positive free cash flows and further deleverage our balance sheet," he noted.
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He added, "We are focused on getting the return ratios back to a healthy level and expect this to happen over the next few years. With the Andhra plant capacity, we have enough capacity for a while therefore the capex intensity will come down," he said.
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