State support for Apollo Tyres’ investment in Hungary production

Earlier this year Apollo Tyres announced it would transfer much of the remaining car tyre production in Enschede, the Netherlands to its factory in Hungary. To accommodate this change, the tyre maker has approved a HUF 4.4 billion (£11.2 million) investment to modernise and expand consumer tyre production at the Gyöngyöshalász site. Hungary’s government is supporting this project with a HUF 1.4 billion (£3.6 million) grant.

Announcing the grant on Monday, Hungary’s foreign affairs and trade minister Péter Szijjártó stressed that the investment would benefit the country by providing “thousands of jobs,” and the grant thus represents “an important measure” of the government’s policy of opening up to the East, a region whose businesses invested more in Hungary last year than Western businesses. India is now one of the ten largest investor countries doing business in Hungary.

The Gyöngyöshalász plant currently has capacities to produce more than 5.5 car tyres and 675,000 truck and bus tyres per annum. Apollo Tyres exports at least 96 per cent of output, including to original equipment customers. Plant manager C. Krishna Kumar reports that production volumes in Gyöngyöshalász are steadily increasing and have now reached 90 per cent of capacity. Original equipment tyre supply deals were recently signed with two German OEMs.