All Set to Beat the Pack

Apollo Tyres manufactures and markets rubber tyres, with a global presence. Headquartered in Gurgaon, Apollo Tyres has manufacturing plants in Asia, Europe and Africa and operates in the segments of passenger cars, light trucks, buses, off-highway and bicycle tyres, retreading material and retreaded tyres. The company's key brands include Apollo, Kaizen, Maloya, Regal and Vredestein. Its European brand Vredestein, acquired in 2009, is a hundred-year-old brand based in the Netherlands. It designs and manufactures tyres under the Apollo and Vredestein brand names through its offices in Europe and North America. Domestically, it competes with MRF, JK Tyre, CEAT and Balkrishna Industries. Strengths Balancing act: Apollo Tyres has positioned itself very well in the domestic and global markets by balancing both the markets. The company has 26 per cent market share in the domestic commercial vehicle tyre segment and 23 per cent in passenger vehicle segment (as per an ICICI Direct report). Through its European subsidiary Vredestein, it has made its global presence strong. High margin: The company has a high revenue share from the replacement market, which is more than 70 per cent. The replacement market comes with a high margin. Therefore, Apollo Tyres has a higher operating margin than the core competitors, MRF, Goodyear, CEAT and JK Tyre, with the only exception of Balkrishna Industries, which is wholly into the higher-yielding off-road tyre segment. Global edge: Vredestein specialises in high performance summer and winter tyres and is a highly profit-making company, thus churning rich dividends for the parent company. Vredestein has an operating marg

This article was originally published on January 28, 2015.