Apollo Mission: Tyre co plans to conquer US a second time

Moneycontrol BureauThree years since a failed attempt to enter the US market through a USD-2.5-billion merger with Cooper Tire & Rubber Co, Apollo Tyres’ Managing Director Neeraj Kanwar has charted out a fresh plan to set foot in the world’s biggest tyre market.

According to an article in Mint on Wednesday, Kanwar has put together a small task force to put his US plan into action. Steven Smidlein from Goodyear Tire and Rubber Co has been roped in as the Senior Vice President for North America and will be responsible for building the brand and sales in the region for both Apollo and its 2009 Dutch acquisition Vredestein. Two Research and Development (R&D) executives will also be joining to work to develop products for the US market.

Building products suitable for American vehicles, which are different from those in Europe, is one of the key challenges, Kanwar said in an interview. "Our (Apollo’s) coverage of product mix is only 10 percent of the American car market. The first challenge is to take it to 70 percent. That will only be done through R&D," he said.

Although the real fillip from the US market will only come in the next decade for Apollo, it will support the target set by the company of becoming a USD 6-billion company globally by 2020 from around USD 3 billion now.

Abdul Majeed, Partner and Auto Practice Leader at PricewaterhouseCoopers (PwC), believes Apollo emerges competent in price-sensitive markets but now needs to build products for customers who are willing to pay for good products.

For now though Apollo remains just a speck in the US ocean with exports at roughly 150,000 units a year to a country with USD 47 billion tyre market in which 300 million tyres are sold annually.