05 Feb 2021 13:08 IST

Apollo Tyres tread a tough path to success

The tyre manufacturer rolled out a range of innovative products to power through a crucial crisis

From being a company whose founder Raunaq Singh reportedly wished to dispose it of for just ₹1 at one stage, Apollo Tyres has grown to become the second largest tyre manufacturer in India. Raunaq Singh was an entrepreneur who shifted base to India after partition. After some initial struggle to make ends meet, he started a successful spice business in Kolkata. As fate would have it, a serendipitous encounter with a German businessman led to his establishing the ‘Bharat Steel Pipes,’with German funding, in Kolkata.

The company did very well and soon the founder was looking at venturing into other business options. An invitation from the then-Kerala Chief Minister to start a business in Kerala led to the birth of Apollo Tyres in 1972. The first factory was soon up and running at Perambra in Thrissur, Kerala. The corporate office, however, is in Gurgaon.

No easy ride

Apollo Tyres almost went bankrupt in the first few years of its operations; faced several management and union issues; and severe losses due to price fluctuations and the return of tyres. The situation was so bad that even employee salaries could not be paid.

 

 

Onkar Kanwar, Chairman and Managing Director, Apollo Tyres

 

 

 

It was at this stage in 1979, when the founder contemplated selling the company for a ridiculous amount, as mentioned at the beginning, that his son Onkar Singh stepped in. He pruned the workforce, retaining the most dedicated employees; garnered funds from banks and financial institutions; and along with his team, did a radical rethink on the product range, focusing only on truck and agriculture tyres and dropping the rest. The drastic measures helped the company pull itself back from the brink. By 1986, Apollo Tyres had made a name for itself in truck tyres and crossed the ₹100 crore mark in turnover.

This was only the beginning of its march forward. Despite some acquisitions that did not work as well as expected and some failed deals, the company forged ahead. Through organic and inorganic growth and with a first-rate R&D department, Apollo Tyres managed to expand its product range to cover multiple applications for various customers across geographies.

Value of innovation

Its product range today covers commercial vehicles, two-wheelers, passenger transport, and farm and industrial vehicles. The tyres are manufactured at seven manufacturing facilities — five in India and two abroad, in Netherlands and Hungary. Its network of 5,000 dealerships, including 2,500 exclusive outlets, caters to its customers.

 

Apollo super zone retail outlet in Mumbai   -  Adeel Halim| Bloomberg

 

 

 

Today, as one of the leaders in the domestic market, it exports to over a 100 countries worldwide. Its turnaround may be attributed to several factors, not least its focus on customer needs, including a study of load, mileage requirements, and safe driving habits. An array of innovative marketing practices also contributed to high brand recall among consumers.

It is said to have several firsts to its credit such as introducing packaging, establishing customer loyalty programmes, and in the product line — introducing India’s first farm radials and a range of high-speed tubeless passenger car tyres. It is also reported to be the first to successfully acquire a major foreign tyre brand — Dunlop, South African 2006. It was sold in 2013 to Sumitomo Rubber.

Apollo acquired Vredestein Banden B V in the Netherlands in 2009, but the Vredestein tyre will be introduced in India only this year. The company recently launched its bike radial tyres. It has also launched an e-commerce site to allow purchase of car and two-wheeler tyres online and the fitting will be done by the nearest dealer. Customers in Delhi-NCR, Mumbai, Kochi, and Bengaluru are the first beneficiaries of this scheme. Plans are afoot to extend it pan India.

Apollo Tyres advertises across print and television ads with intriguing taglines and campaigns like Bad roads go to good places; Apollo Test the Alpha Challenge; Apollo Alpha – Add more thrill to your beast; Go the distance Heroes; India’s playing millions; and a visually pleasing ad ‘Ganga,’ music composed and produced by AR Rahman, featuring its brand ambassador Sachin Tendulkar. The ad symbolises the spirit of driving India’s progress exemplified through Apollo, Tendulkar and river Ganga.

 

 

 

 

Environmental consciousness

Its CSR activities are implemented through the Apollo Tyres Foundation, set up in 2008. Main focus areas include skill development, computer literacy, farming practices improvement, educational support to girls, sanitation, drinking water provision, livelihood enhancement, TB awareness and treatment, vision care initiatives to remote populations, and oral hygiene promotion. They also develop programmes and initiatives related to its business, such as safe driving habits for passenger car customers and HIV-AIDS awareness and prevention programmes for commercial vehicle drivers. It has established more than 30 healthcare centres across 18 states to look into health issues faced by truck drivers, who make up its key customers.

Tree plantation, pond management, mangrove conservation, park maintenance, end-of-life tyres/ ELT playgrounds, and sustainable agriculture programmes make up its contribution to the environment. Apollo Tyres has won almost 20 awards for its CSR projects and several for its environmental sustainability record — water management, energy conservation, and waste management. Auto India gave it the Best Brand award in 2008 and 2009. It recently received the IRF Trusted Mark and the IPR Leadership award for Excellent Contribution in the field of Patents. Gross sales this year crossed ₹160 billion, with truck and bus tyres and passenger vehicle tyres dominating sales.

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