Apollo Tyres launches Vredestein brand in India

Apollo Tyres Thursday launched its premium European brand Vredestein to cater to high-end cars and SUVs in India.

New Delhi: Apollo Tyres Thursday launched its premium European brand Vredestein to cater to high-end cars and SUVs in India.

The company, which acquired the brand when it bought the Netherlands-based firm in 2009, said it will initially manufacture Vredestein tyres in Holland, but may consider production in India in the future.

"The new range will target high-end cars in the country, it will complement our existing brands. We are targeting a monthly sales of a round 5,000 tyres to start off in the after-market replacement segment," Apollo Tyres' Chief India Operations Satish Sharma told reporters here.

The total size of passenger car tyres in the after-market segment in India is around 14 lakh units per month, of which 70,000 is the premium car segment, he added.

When asked if Vredestein tyres will be produced in India, Sharma said: "The tyres will be manufactured at Holland facility. Eventually, we may look at manufacturing them in India. As part of our strategy, we would like to present the tyre as an European brand to start with."

Vredestien has a production capacity of around 7 million tyres per annum at its plant in Holland.
Commenting on the marketing strategy, Sharma said: "We are looking at select business partners very carefully. We will launch the brand in 23 cities initially."

Vredestein tyres will be distributed through a set of partners mostly in the tier I and tier II cities. These premium tyres would be sold through multi-branded outlets, including existing Apollo Zones, the company said.

The broad strategy is to have multi-brand showrooms. Stand-alone Vredestein showrooms would be a far fetched reality, Sharma added, when asked if Vredestein tyres would be sold through stand-alone exclusive outlets.

"The new brand will have tyres from 16 inch to 20 inch. For pricing it would depend upon SKUs but would be benchmarked in the same set as Pirelli or Michelin," Sharma said.

Commenting on the introduction of Vredestein brand into India, Apollo Tyres Chairman Onkar S Kanwar said: "India has been and will continue to be a very important market for us. India will benefit immensely from the globalisation efforts of the company."

Sharma said the company's overseas business contributes around 35 percent to its consolidated revenues. In 2012, revenues stood at USD 2.34 billion.

India is the biggest market for Apollo, followed by Germany.

"For the last three years, we have been working to de-risk our business. We are trying to make inroads into various regions, including ASEAN," Sharma said, when asked about the ongoing slowdown in the Indian auto sector.

"The slowdown has impacted us. We would like to run at 90 percent of capacity, but we are definitely not running at 90 percent," he said, adding the farm sector was the silver lining in the bleak environment and 40 percent of sales came from tractor tyre sales.

When asked about the company's impending takeover of US-based Cooper Tires, Sharma said: "If the acquisition happens it gives us a bouquet of brands. They have 4-5 good brands. So, obviously if the acquisition is to happen it will allow us to enter several channels. It is a nice marketing opportunity to have."

In June, Apollo Tyres had announced that it would acquire Cooper Tire & Rubber Company in an all-cash transaction valued at about Rs 14,500 crore (USD 2.5 billion).

The deal, however, ran into rough weather with the two parties fighting a legal battle following problems related to the US firm's operations in China and also over concessions to the workers union. Apollo had wanted a reduction of price.