India's Apollo Tyres sets sights on 5 per cent of Thai market in three years

Despite a crowded marketplace and no manufacturing presence in Thailand, Apollo says it is confident of achieving its target of rising to a top-10 position within that short period of time.

 

The India-Thailand Free Trade Agreement has brought import duties down to 6 per cent for tyre imports from India for trucks, buses and passenger vehicles, and 3 per cent for farm tyres. That has helped the company make its tyres affordable here, said Apollo Tyres’ president for Asia-Pacific, Middle East and Africa, Satish Sharma.

 

“We’re very competitive in pricing, even that [though] we have to import from India and the Netherlands," he said.

 

Sharma said Apollo Tyres, whose sales in Thailand grew by 300 per cent last year, though from a small base, had an ambition to have a manufacturing facility in Asean eventually, but its current focus would be on its newly acquired facility in Hungary.

 

"We’ve just invested in Hungary. It’s a matter of priority. We will learn more from the market and build the scale" before investing in a plant in Thailand, he said.

 

With sales of US$2.2 billion (Bt72 billion) in its 2014 fiscal year, Apollo Tyres is one of the first Indian tyre manufacturers to expand and make acquisitions internationally. It currently has four factories in India and one each in South Africa, the Netherlands, and the latest one in Hungary.

 

Sharma said the market perceived the Apollo Tyres brand as superior to Chinese tyres and slightly below Korean brands. "But we try to tell them, we are a global brand. Our positioning strategy is to be on the low end of the Tier 1 brands for the truck and bus segment, and at the middle of the Tier 2 brands for the car market," he said.

 

The upper-end tyre market in Thailand is dominated by Japanese (such as Bridgestone), European and US brands, while the cheaper segment or the so-called second-tier brands include Maxxis from Taiwan and local brands such as Deestone.

 

Sharma said Apollo Tyres planned to launch a product developed uniquely for the Thai truck and bus market in the next few months, after launching a completely new range of such tyres for the Indonesian market a month ago.

 

Its target of a 5-per-cent market share covers most segments, although the company sees it as very achievable for the truck and bus segment, whose customers have evidence of the long-lasting performance of Apollo tyres.

 

Apollo started its business in Thailand about 18 months ago and opened an office in Bangkok last May that also serves as its regional headquarters for Asean. Thanks to Thailand’s status as one of the world’s largest producers and exporters of natural rubber, it has attracted many global tyre makers to establish manufacturing bases here.