Case study

APOLLO TYRES
Purpose of the case
 How to track or identify opprtunities and
threat in macro-environment

 How to assess the importance of

demographic,economic,political and
technological factors

 How to sustain,survive and grow in the

changing business milieu or environment
 History of Apollo Tyres
Apollo Tyres Ltd is a high-performance company and
the leading Indian tyre manufacturer. Head quartered
in Gurgaon, Registered as a company in 1976, Its
first plant was commissioned
in Perambra in Kerala state. It commenced its
production in 1977 under the leadership of Raunaq
Singh.Apollo Tyres Ltd is the fastest growing tyre
manufacturer, with annual revenues of over US$ 1.8
billion (2009-10).. In 2006, the company acquired
Dunlop Tyres International of South Africa. The
company now has four manufacturing units in India,
two in South Africa and two inZimbabwe.
What made the strategy head of
Apollo tyres worried?
 The changing environment of Indian
economy which includes macro factors
like:

GDP IIP
Inflation Savings
Infrastructure Monsoon
Population Transport
Agricultural Production Interest rate
 Contents of BCG Report
 Methodology

 The Indian tyre industry

 The Indian Economy

 Relationship b/w transport and economy

 Demand for tyres

 The Indian Tyre Industry
 The 13000 crore industry
 Depends on Agricultural production, Industrial
performance,Transportation needs and production of
vehicles.
 Mainly dominated by Organized Sector
 2.61 lakh villages,6.23 lakh kms metalled and 9.81
lakh kms unmetalled roads
 Major players are MRF,Apollo tyres,Ceat and JK
industries which accounts for 63% of market share
 Free import of new tyres but import of retreaded tyres
is resticted
 The Indian Economy
 Economic reforms in 1991, in reaction to severe
foreign exchange crisis
 Reforms include liberalized foreign investment
and exchange regimes
 Significant reduction in tarrifs and other trade
barriers
 Adjustments in govt. monetary and fiscal policies
Effect : Higher growth rate,lower
inflation,increase in foreign investment, increase
in GDP from 5% in 1997-98 to 6.8% in 1998-99.
 Relationship b/w transport
and economy
 Strong relationship b/w economic development
and transport demand

 Economic growth implies increase in goods and

passenger transport

 Transport is a major contributor to economy

 Economic growth increases transport requirement

which impacts demand for tyres
 Demand for Tyres
As Indian Economy is one of the fastest growing economy in the
world which means that there is increasing flow of money
creating more and more jobs increasing the purchasing power
of people and good infrastructure resulting to economic
growth hence leads to increase in demand of transportation
needs which means demand for more tyres.Demand for tyres
is mainly from segments like original equipment makers
and replacement and exports.

Example: Maruti Suzuki to set up a plant in manesar to meet

its rising demand which could also result in demand for tyres .