The origin of the Indian Tyre Sector goes back to 1926 when Dunlop Rubber Limited set up the first tyre organization in West Bengal. MRF followed suit in 1946. Since that time, the Indian tyre market has grown swiftly. The Indian tyre sector is highly raw material intensive and is a Rs 20000 Cr industry.
According to a study by Credit Examination and Research Limited (Attention), the tyre industry is likely to show a wholesome growth rate of 9-10 percent over another five years.
Many innovations happening.
Four major companies alone keep 63% of the arranged tyre market out of the 40 listed corporations in the tyre sector.
Tyre is in demand at 3 different levels. Original equipment market, substitution market and export market.
Apollo Tyres Limited:
It’s the fastest growing top tyre producer, with twelve-monthly turnover of Rs 5036.80 crores (2009-2010). It was founded in 1976. Its first of all plant was commissioned in Perambra in Kerala state. In 2006 the business acquired Dunlop Tyres International of South Africa. The company now has four manufacturing models in India. It has a network of over 4,000 dealerships in India, of which over 2,500 are exceptional outlets. "Apollo Tyres Ltd." possesses been pioneer in the execution of "Six Sigma" among all the tyre companies in India, and is normally in the set of top 15 tyre makers of the world with regards to Revenues.
Established brand name
Extensive distribution network
Effective R& D initiatives
Backward integration to eradicate the dependency
Leverage opportunities across globe
Quick response to changes
Strategic alliance with vehicle giants (maruthi, ford etc)
Profitability remarkably correlated with cost of raw materials (rubber-70% of TC).
No control on cost because of high competition
Highly capital intensive market
Lockouts and hit (especially Kerala plant)
No occurrence in 2&3 wheeler markets
Growing demand for automobiles
Rise in replacement demand
Access to global way to obtain recycleables & global market
Economies of scale with wider market segments through expansion
Rise is normally disposable hands of the center class
The national thrust in street infrastructure facilitating a tremendous fillip to surface transportation in the coming years
Continuous increase in the price of raw material (rubber)
Cheaper tyre from China and various other neighbouring countries.
Cyclical nature of automobile industry
Political instability in the foreign countries where Apollo have got ventured into (Hungry)
Inflation in Zimbabwe, leading to no net income from investment.
Strategies – THE STREET to success:
Ever because the inception of Apollo Tyres Ltd, the company has been powerful in developing approaches which drastically helped in its development. Expansion of organization is given great focus and approaches are developed relative to the situation and certain requirements. Apollo is noted because of its ability to foresee the prospects and act accordingly thus converting the opportunity into their strength. Apollo is definitely keen in maintaining an excellent and effective relationship with their suppliers and customers. Their entry strategies is a huge success and possesses helped them set up a good foothold in the foreign countries as well. In order to have got a control on the way to obtain raw materials Apollo tyres also have ventured into backward integration approaches in areas where they encounter problems with the supply of recycleables. Capacity expansion of plant life is also undertaken thus supporting Apollo Tyres Ltd in attaining economies of scale leading to a direct effect on the pricing strategy.
The Key Strategies undertaken by Apollo Tyres over time are been the following.
Started operation in 1976 in Kerala, which may be the biggest maker of rubber in the united states ensuring raw material supply.