With its Hungary plant going on stream, Apollo Tyres expects to increase its share of the in Europemarket to 3.5 per cent and to start supplying to major brands, including Volkswagen and Mercedes-Benz.
The company also said that the US would be its next stop for building its brand.
Neeraj Kanwar, vice-chairman and managing director, Apollo Tyres, said that company's Vision 2020 for Europe was to be a premium brand, both in terms of size and price. Tyres on or above a 16-inch diameter, catering to the top end of the market, are considered to belong to the premium segment.
"This facility will help us further increase our presence and market share in Europe. From being a replacement market focused company in Europe, we would soon be starting supplies of our tyres to all the leading car makers in Europe, including Volkswagen and Mercedes-Benz," said Kanwar.
The company has already started discussion with European original equipment manufacturers (OEMs) and has brought a satellite research and development (R&D) division online in Frankfurt to only cater to such OEMs.
The company expects its market share to increase to 3-3.5 per cent in the next 2-3 years, from its current share of around 2.4-2.5 per cent, in the European market.
The European market is estimated to be around 300,000 million units. Out of which, Apollo accounts for 7.5-8 million tyres. The company aims to double this figure. Towards this end, the Hungary facility will produce 5.5 million tyres. Furthermore, the facility is expected to ramp up in 12-15 months. "The full volume from the Hungary facility will come in the balance sheet in the year 2018-19," Kanwar added.
With the inauguration of the Hungary greenfield facility, the company has crossed another milestone in its global growth journey. This will be the company's sixth tyre plant and the first overseas greenfield facility by an Indian tyre company.
Built over 72 hectares, the plant's construction began in April 2015. The company is investing Euro 475 million in this facility.
The final capacity at the end of Phase-I would be 5.5 million passenger car & light truck tyres and 675,000 commercial vehicle tyres. This facility will complement Apollo Tyres' existing facility in the Netherlands and will produce both the Apollo and Vredestein brands of tyres for the European market.
Vredestein will be for both OEMs and the replacement market, while the Apollo brand will primarily cater to the replacement market in Europe.
Currently, 40 per cent of Apollo Tyres' total revenue comes from India, while Europe accounts for nearly 26 per cent. With the new facility coming up, this ratio is expected to change.
"While India will continue to drive the major chunk of the company's business, with about a 55-60 per cent share of total revenue, Europe's contribution is expected to increase to 30 per cent from the current 26 per cent because of the Hungary plant," said Kanwar.
The company is also trying to create a brand presence in the US. The initial plans are for marketing in the US instead of manufacturing, and the company is looking at creating a pull demand from the customers in the US.
Apollo Tyres was the first Indian tyre major to make an international acquisition in 2006, followed by a second one in 2009. It was also the first one to start selling India-made products in the European market, which is considered to be the most advanced automotive market.
The company is now poised to be a major force in key international markets on the back of its significant investments in R&D and manufacturing, supported by its brand building activities.