Apollo to sell Cooper tyres in replacement market

Apollo Tyres, which recently announced the acquisition of US-based Cooper Tire & Rubber Co for around Rs 14,500 crore, plans to sell Cooper’s tyres in the replacement market.

Apollo is already a dominant player in India’s replacement market. Most Indian tyre-makers manufacture more tyres for the replacement market than for original equipment manufacturers (OEMs).

Post the deal announcement, Apollo had said tyres for sports utility vehicles (SUVs) would be the first to come to India from the Cooper stable, which will go to various OEMs here.

VARIOUS PRICE-POINTS

“Globally, Cooper is a strong player in the replacement segment and we will certainly use their portfolio to offer a full suite of products to our customers across a basket of brands. These will offer value across price points and customer needs,” Neeraj Kanwar, Vice-Chairman and Managing Director, Apollo Tyres told Business Line. However, he also said Apollo could make more impact on Cooper’s growth in the North American OEM segment through its global OEM relationships.

Apart from SUV tyres for OEMs, Apollo expects several other complementary areas where it can use its distribution network in India to cross-sell products from the Cooper stable, Kanwar said.

“This is not restricted to India alone. We will use the same business model in other parts of the globe. For instance, Apollo can introduce its branded truck tyres into China and North America through Cooper’s existing distribution network, an area where Cooper Tire is not strong,” he said.

REVENUE TARGET

Kanwar said the most important thing right now was to meet the company’s revenue target of $6 billion by 2016.

“Our immediate task is to ensure a smooth and successful integration to ensure that we can offer growth and value for our stakeholders,” he said.

Analysts say the replacement market plays a big role for tyre manufacturers in India, as more than 70 per cent of the production reaches this market.

According to the Automotive Tyres Manufacturers’ Association, India produced 922.05 lakh tyres during April-December 2012 and the industry recorded a turnover of Rs 46,000 crore.