Apollo in OE Talks with Skoda & Hyundai

Apollo Tyres, whose chairman Onkar S Kanwar recently voiced the company’s ambition of doubling turnover to US$2 billion within the next three years, is reportedly in OE supply talks with both Skoda and Hyundai. Specific details of these negotiations have not as yet been made public. And while the Indian tyre major has not at this stage been selected as an OE supplier for the Tata 1 lakh (£1,250) car – JK Tyre and MRF Tyres will initially fulfill this role – it is not ruling out the possibility of coming on board at a later date.

“When Tata Motors was initially finalising the vendor base, we did speak with them,” Apollo Tyres’ chief, India Operations Satish Sharma commented to India’s Economic Times newspaper. “However we plan to follow a different model. We would initially supply tyres in the after-sales market for the Tata Rs 1 lakh car and once the volumes pick up, we might become their OE partners.”

A place on the OE supplier list for the 1 lakh car could mean a great deal to Apollo. The Tata 1 lakh car is a 600cc rear-engine vehicle due for release by mid-2008 and intended to serve as an Indian ‘people’s car’ that will revolutionise personal transport in India and other Asian countries such as Vietnam and Indonesia, and as such is likely to sell in enviable quantities. The car will sell for around half the price of its competitors, but despite its bargain price Tata claims the 1 lakh car will not be a “poor substitute” for a car. When news of the vehicle was first announced in March 2003, Tata chairman Ratan Tata stated “It will look like a car and have proper seating – stretched canvas seats would not, for example, be acceptable. It would be all right for it to be a bit more noisy than an ordinary car, but it has to be both simple and safe.”