Increasing market share for Apollo

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SUMMER INTERNSHIP PROJECT by me at Apollo Tyres....... Some data has been hidden due to confidentiality................................................................................................................................................................................................................................

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<ul><li> 1. NAMAN SHARMA - B.I.M.M PUNE </li></ul><p> 2. A RESEARCH PROJECT REPORT ON INCREASING MARKET SHARE IN RURAL AND SEMI URBAN MARKETS FOR SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE P.G.D.M DEGREE COURSE OF BIMM BY:- NAMAN SHARMA MM1315314 2013-15 3. TYRE CONSTRUCTION BIAS PLY (NYLON) RADIAL PLY(STEEL) NAMAN SHARMA - B.I.M.M PUNE 4. NAMAN SHARMA - B.I.M.M PUNE 5. TYPES OF TREADS COMMERCIAL VEHICLES RIB PATTERN LUG PATTERN BLOCK PATTERN NAMAN SHARMA - B.I.M.M PUNE 6. TYPES OF TREADS PASSENGER VEHICLES UNDIRECTIONAL ASYMMETRICAL COMBINATION NAMAN SHARMA - B.I.M.M PUNE 7. TYPES OF TREADS OTR VEHICLES ROCK PATTERN TRACTION PATTERN BLOCK PATTERN RIB PATTERN SMOOTH PATTERN NAMAN SHARMA - B.I.M.M PUNE 8. TYRE TERMINOLOGY TRUCK TYRES 10.00 20 18PR 10.00 Section Width (Inches) - - Bias construction 20 - Rim Diameter (Inches) 18PR Ply rating PASSENGER CAR TYRE 185/65 R 14 86 H 185 Section width (mm) 65 Aspect ratio(%) = Sidewall Height computed as 65% of 185mm R Radial construction 14 Rim Diameter (inch) 86- Load Index rating H Speed rating NAMAN SHARMA - B.I.M.M PUNE 9. NAMAN SHARMA - B.I.M.M PUNE 10. NAMAN SHARMA - B.I.M.M PUNE 11. NAMAN SHARMA - B.I.M.M PUNE 12. NAMAN SHARMA - B.I.M.M PUNE 13. NAMAN SHARMA - B.I.M.M PUNE 14. NAMAN SHARMA - B.I.M.M PUNE 15. CAR SEGMENT LENGTH OF THE MODEL TYPE CAR MODEL BELONGING TO THAT SEGMENT A1 Upto 3400 mm Nano A2 3401 to 4000 mm Alto,i10,Zen,Wag on R A3 4001 to 4500 mm Manza,Logan,Dzi re,City A4 4501 to 4700 mm Corolla,Octavia,o ptra A5 4701 to 5000 mm Accord,Camry,So nata A6 More than 5000 mm Mercedes S class B1 Vans/Jeep Versa,Omni B2 MUV/MPV Sumo,Innova SUV SUV Vitara,CRV NAMAN SHARMA - B.I.M.M PUNE 16. NAMAN SHARMA - B.I.M.M PUNE 17. NAMAN SHARMA - B.I.M.M PUNE 18. NAMAN SHARMA - B.I.M.M PUNE 19. NAMAN SHARMA - B.I.M.M PUNE 20. Chairman &amp; Managing Director Onkar Singh Kanwar Corporate Headquarters Gurgaon (India) Manufacturing Plants Perambra , Kerala (India) Kalamassery, Kerala (India) Kanchipuram, Tamil Nadu (India) Limbda, Gujarat (India) Bulawayo, Zimbabwe (Africa) Durban, South Africa (Africa) Enschede, Netherlands (Europe) Regional Hubs Bangkok, Thailand Dubai, UAE NAMAN SHARMA - B.I.M.M PUNE 21. Brands - Apollo Vredestein Regal Myola Kaizen NAMAN SHARMA - B.I.M.M PUNE 22. 0 500 1000 1500 2000 2009 2010 2011 2012 2013 Series1 950 1160 1395 1595 1785 MT/Day 0 50 100 150 2009 2010 2011 2012 2013 Series1 49.8 81.2 88.7 121.5 127.9 RupeesBillion 0 2 4 6 8 2009 2010 2011 2012 2013 Series1 1.4 6.5 4.4 4.1 6.1 RupeesBillion NAMAN SHARMA - B.I.M.M PUNE 23. 65% 23% 12% Revenue By Geography India Europe South Africa 24% 66% 10% Revenue By Customer OEM Replacement Export 33% 48% 9% 9% 1% Revenue by Product Passenger Vehicle Truck-Bus Off Highway Light Truck Others Country/Area Sales (In Billion Rupees) India 83.135 Europe 29.417 South Africa 15.348 CUSTOMER SALES ( In billion rupees) OEM 30.696 Replacement 84.414 Export 12.79 PRODUCT SALES (In billion rupees) Passenger Vehicle 42.207 Truck-Bus 61.392 Off Highway 11.511 Light Truck 11.511 Others 1.279 NAMAN SHARMA - B.I.M.M PUNE 24. POTENTIAL PRODUCT Height to Width Ratio is high AUGMENTED PRODUCT Rapid Acceleration, Multi Terrain, Superior Control at High Speeds EXPECTED PRODUCT High Elasticity, Low Steering Force, Low Maintenance, High Safety BASIC PRODUCT Traction, Durability, Reliability CORE BENEFIT Comfortable Ride Passenger cars 4x4 Light Truck Truck/Bus Bicycle OTR &amp; Earthmover Specialty 2 Wheeler 3 Wheeler Apollo Vredestein Kaizen Regal Mayola NAMAN SHARMA - B.I.M.M PUNE 25. COMMERCIAL VEHICLES PASSENGER VEHICLES OFF THE ROAD VEHICLES BRAND XT-7 XT-7 HAULUG XT-7 GOLD AMAR AMAR DLX AMAR AT-RIB AMAR GOLD CARGO MILLER CARGO TUF CARGO MILLER CARGO SL MILESTAR CHAMPION CHAMPION GOLD XT-9 XT-9 PLUS XT-9 GOLD XT-100K LOADSTAR SUPER LOADSTAR SUPER GOLD LOADSTAR SUPER XP RANCER DURAMILE LUG MILLER ENDURANCE MD ENDURANCE MA326 ENDURANCE MA ENDURANCE CD ENDURANCE LD ENDURANCE RA BRAND ASPIRE 4G ASPIRE ALNAC 4G AMAZER 4G AMAZER 3G MAXX AMAZER 3G AMAZER XL ACLERE MAXX ACLERE APTERRA HP (For SUV) APTERRA HL (For SUV) APTERRA HT (For SUV) APTERRA AT (For SUV) QUANTUM (For VAN/JEEP) QUANTUM PLUS (For VAN/JEEP) SPORTRACS (Vredestein Banden) Ultrac Ceuto (Vredestein Banden) Ultrac Sessanta (Vredestein Banden) Ultrac SUV Sessanta (Vredestein Banden) BRAND KRISHAK PREMIUM POWERHAUL FARM KING (RADIAL) KRISHAK GOLD KRISHAK SUPER KRISHAK PREMIUM KRISHAK PREMIUM CR Y-LON XTRAX IT 416 XTRAX IT 426 XTRAX E3 XTRAX GRADER XTRAX RC317 DHRUV XTRAXNAMAN SHARMA - B.I.M.M PUNE 26. NAMAN SHARMA - B.I.M.M PUNE 27. NATURAL RUBBER 44% NYLON TYRE CORD FABRIC 19% CARBON BLACK 12% RUBBER CHEMICALS 5% YL BER % PBR 5% SBR 5% OTHERS 6% Raw Material Total cons.* Tyre Sector Cons* Non tyre sector cons* Total Imports Tyre Sector imports Non Tyre sector Imports Natural Rubber 964400 65% 35% 213780 95% 5% SBR 185200 73% 27% 137000 100% - PBR 134600 83% 17% 62600 100% - Carbon Black 410000 100% - 90000 100% - Nylon Tyre Cord 125000 100% - 58000 100% - Rubber Chemicals 40000 100% - 20000 100% - Steel tyre cord 30000 100% - 20000 100% - Butyl rubber 58000 100% - 58000 100% - NAMAN SHARMA - B.I.M.M PUNE 28. 18100 17900 17800 17300 17000 17000 17200 17600 17800 17000 16400 16600 16800 17000 17200 17400 17600 17800 18000 18200 Priceper100kg Time RUBBER PRICES NAMAN SHARMA - B.I.M.M PUNE 29. NAMAN SHARMA - B.I.M.M PUNE 30. NAMAN SHARMA - B.I.M.M PUNE 31. NAMAN SHARMA - B.I.M.M PUNE 32. Strengths:- Strong Brand recall Huge Brand portfolio Huge Product portfolio Robust Inorganic growth Operates in large international markets Extensive distribution network Established a premium position in European market Weakness:- Involvement in price fixing allegations impacts companys reputation. India has large 2-3 wheeler tyre segment however Apollo does not manufacture for this category. Company is not able to pass cost escalations to consumers due to intense competition. Labour unrest and strikes. NAMAN SHARMA - B.I.M.M PUNE 33. Opportunities:- Poised to benefit from growing automotive manufacturing industry in India. Expansion into Sri Lankan automobile market. Europe developing as a key market Company is planning to grow into new markets such as America Australia and South East Asia Threats:- Economic downturn in key markets such as India and Europe Increased competition from global players like Michelin and Bridgestone in India particularly in truck bus radial tyre category Increase in raw material price volatility Threat from cheap Chinese import NAMAN SHARMA - B.I.M.M PUNE 34. SO STRATERGY Huge brand portfolio of the company will help them during their inorganic growth in new markets by gaining more market share and at the same time de risking the company from relying only on 1 product or 1 market. Growth in European market will increase companys global presence and will lead to higher brand recall and will make company a global player. Exploration of new virgin markets in South East Asia and Africa may make company market leader over there and can increase the sale drastically WO STRATERGY Lack of presence in 2 and 3 wheeler segments will be a huge setback for company in new markets. Involvement in price fixing allegations may affect companys image in new market ST STRATERGY Strong brand recall under their Vredestein brand but economic downturn in European market will slow them down. Have good financial position but have to compete with international brands. WT STRATERGY Large amount of labour strikes will affect production thus hampering sales in new market Government policies will play a crucial role in new markets Cheap Chinese import will take benefit from intense competition thus company may be forced to reduce prices further NAMAN SHARMA - B.I.M.M PUNE 35. GROWTH STRATEGIES HORIZONTAL INTEGRATION - APOLLO DUNLOP MERGER Purchased Dunlop tyres in 2006. 3 production units whose total capacity is 180 tonnes a day APOLLO VREDESTEIN BANDEN ACQUISITION - Added $ 450 million to Apollos Annual sales Entry in European market Plant in Enschede had an annual capacity for 5.5 million tyres. VERTICAL INTEGRATION- Acquired 10,000 hectares of rubber plantation in Laos in South East Asia DIVERSIFICATION Apollo LogiSolutions UFO Moviez NAMAN SHARMA - B.I.M.M PUNE 36. NAMAN SHARMA - B.I.M.M PUNE 37. Turnover of Indian tyre industry Rs 43,000 crores Tyre Production (Tonnage) 15 Lakh M.T Tyre Production All Categories 2254 lakhs Number of tyre companies 39 Industry Concentration 10 companies account for 95% of production Radialisation Level Passenger cars 98% Light Commercial Vehicles 20% Heavy Vehicles- 18% NAMAN SHARMA - B.I.M.M PUNE 38. 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 Truck/ Bus Passen ger Cars LCV Tractor Front Tractor Rear Tractor Trailer ADV Scoote r Motor Cycle Industr ial OTR Series1 16085 28736 6688 2756 1889 1022 293 22194 44857 681 196 Sales(In000numbers) Categorywise tyre Supply NAMAN SHARMA - B.I.M.M PUNE 39. SEGMENT REVENUE(in %) TRUCK/BUS 54% LIGHT TRUCK 9% PASSENGER CARS 14% FARM 8% TWO WHEELER 13% OTHERS 3% Tyres for: 2011-12 2012-13 Change Truck &amp; Bus 119.51 127.09 6% Passenger Car 213.79 238.83 12% L.C.V 50.52 44.95 -11% Tractor Front 20.59 21.13 3% Tractor Rear 14.13 14.26 -0.3% Tractor Trailer 7.48 6.77 -9% Scooter/Moped 166.36 121.58 -27% Motor cycle 340.67 320.80 -6% Off The Road 1.44 2.25 56% Other tyres 7.18 7.42 3% Total 941.84 922.05 -2% CATEGORYWISE TYRE PRODUCTION IN INDIA FY 2011-12 2012-13 (April December) (In lakh no.) REVENUEWISE TYRE INCOME FY 2011-12 NAMAN SHARMA - B.I.M.M PUNE 40. Category Production (nos) 2012-13 (April- December) Segmentwise Supply Replacement Market/Govt . OEM Exports Truck/Bus 12709061 9277614 1779268 1652179 Passenger car 23883000 12657990 10030986 1194150 L.C.V 4495000 1887900 1573250 988900 Tractor Front 2113000 1225540 866330 2113 Tractor Rear 1426000 527620 869860 28520 Scooter/Mo ped 12158000 4498460 6808480 851060 Motor Cycle 32080000 12511200 18606400 962400 SEGMENT WISE TYRE SUPPLY FY 2012-13(April-December) Replacement 51%OEM 41% Exports 8% NAMAN SHARMA - B.I.M.M PUNE 41. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Series1 41415 42471 43514 51585 54690 60082 66032 73545 81103 82107 97137 119197125397 0 20000 40000 60000 80000 100000 120000 140000 Totalproduction(In000nos) Growth rate of tyre industry NAMAN SHARMA - B.I.M.M PUNE 42. 0% 0% 1% 4% 4% 9% 13% 14% 23% 32% Indian Tyre Market PTL Enterprises Krypton Govind Rubber TVS Srichakra Goodyear Balkrishna Ceat JK tyres Apollo tyres MRF tyres NAMAN SHARMA - B.I.M.M PUNE 43. Serious anomaly of Customs Duty on raw-material (Natural Rubber@20%) being higher than the Customs Duty on finished product (Tyres @10%) Proposed custom duty for RAW materials not being implemented No . Raw-Material(s) Customs Duty (%) Proposed 1 Nylon Tyre Cord 10% 5% 2 PBR 10% 5% 3 Rubber Chemicals 7.50% 2.50% 4 Steel Tyre Cord 10% 5% 5 Polyester Tyre Cord 5% Nil NAMAN SHARMA - B.I.M.M PUNE 44. Duties of WTO nations under FTA differ from normal duties which creates different prices and price fluctuations Product Custom Duty in % Asia Pacific Trade Agreement Indo-Sri Lanka Agreement SAFTA- Pakistan,Sri Lanka SAFTABang ladesh,Bhu tan,Maldiv es,Nepal India Singapor e CECA India South Korea CEPA India- Chile Agreem ent India- Japan CEPA India Malysia Trade agreeme nt India- ASEAN Truck/Bus(Radial) 10% 8.6 Nil 6 Nil N.C N.C N.C N.C 7 7 Truck /Bus(Bias) 10% 8.6 Nil 6 Nil Nil N.C N.C N.C N.C 7 Motor Cars(Radial) 10% 8.5 Nil 6 Nil N.C N.C N.C N.C 7 7 Motor Cars(Bias) 10% 8.5 Nil 6 Nil Nil N.C N.C N.C N.C 7 Aircraft 0% 2.58 Nil 3 Nil 0.75 2.25 N.C 0 N.C 2 Motorcycle 10% 8.6 Nil 6 Nil Nil N.C N.C N.C 7 7 Scooter 10% 8.6 Nil 6 Nil Nil N.C N.C N.C N.C 7 Industrial Vehicle 10% 8.6 Nil 6 Nil Nil 7.81 N.C 7.3 5 5 Tractor 10% 8.6 Nil 6 Nil Nil 7.81 N.C 7.3 5 5 Use rubber tyres 10% N.C N.C 6 Nil Nil N.C N.C N.C N.C 7 Retreaded tyres 10% N.C N.C 6 Nil N.C 7.81 N.C N.C 5 7NAMAN SHARMA - B.I.M.M PUNE 45. Increase in wear &amp; tear of tyres Creates Replacement demand for Tyres Growing Economy Increase in demand of freight movement Increase in Commercial Vehicle Demand Increase in Tyres Demand from OEMs Creates Tyr replacement demand after 12-18 months Increase in tyre sales Increase in level of income - Increase in Income for disposal Increase in demand for passenger cars - tyres Demand for Replacement in 24 to 48 months NAMAN SHARMA - B.I.M.M PUNE 46. NAMAN SHARMA - B.I.M.M PUNE 47. NAMAN SHARMA - B.I.M.M PUNE 48. NAMAN SHARMA - B.I.M.M PUNE 49. NAMAN SHARMA - B.I.M.M PUNE 50. NAMAN SHARMA - B.I.M.M PUNE 51. NAMAN SHARMA - B.I.M.M PUNE 52. NAMAN SHARMA - B.I.M.M PUNE 53. NAMAN SHARMA - B.I.M.M PUNE 54. APOLLO 17% MRF 21% JK 9% CEAT 3% BIRLA 0% GOODYEAR 13% BRIDGESTON E 18% MICHELIN 0% OTHERS 19% P.C.R SEGMENT APOLLO 20% MRF 22% JK 11% CEAT 8% BIRLA 11% GOODYEAR 25% BRIDGESTONE 0% MICHELIN 0% OTHERS 3%FARM SEGMENT APOLLO 27% MRF 21%JK 19% CEAT 11% BIRLA 14% GOODYEAR 0% BRIDGESTONE 3% MICHELIN 1% OTHERS 4%H.C.V SEGMENT APOLLO 28% MRF 26% JK 19% CEAT 7% BIRLA 6% GOODYEAR 0% BRIDGESTONE 0% MICHELIN 0% OTHERS 14% L.C.V SEGMENT NAMAN SHARMA - B.I.M.M PUNE 55. NAMAN SHARMA - B.I.M.M PUNE 56. Tyre dealers; 35; 97% Tread dealer; 1; 3% TYPES OF DEALER BY PRODUCT Exculsive Apollo Dealer; 20; 57% Multi Brand Dealer; 15; 43% TYPE OF DEALER BY NUMBER OF BRANDS COMPLAINT S; 31; 89% NO COMPLAINT S; 4; 11% NUMBER OF COMPLAINTS MORE THAN 1 TYPE OF COMPLAI 1 TYPE OF COMPLAINT ; 22; 71% NUMBER OF COMPLAINTS NAMAN SHARMA - B.I.M.M PUNE 57. CUSTOMER DEMAND; 6; 40% COMMISSIO N; 6; 40% BOTH; 3; 20% REASON FOR SALE OF OTHER COMPANY'S PRODUCT DO NOT INFLUENCE; 17; 49%INFLUENCE; 18; 51% INFULENCING CUSTOMER URBAN CUSTOMER; 4; 11% RURAL CUSTOMER; 31; 89% HIGHER BARGAINING POWER NAMAN SHARMA - B.I.M.M PUNE 58. PASSENGER CAR 24% COMMERCIAL VEHICLE 72% OFF HIGHWAY VEHICLE 4% CATERGORY WISE SALES NAMAN SHARMA - B.I.M.M PUNE 59. AMAZER 3G 12% AMAZER XL 41% AMAZER 3G MAXX 9% AMAZER 4G 8% QUANTUM 5% QUANTUM PLUS 0% ACELERE 11% ALNAC 4G 6% APTERRA 5% ASPIRE 4G 3% PCR Sales NAMAN SHARMA - B.I.M.M PUNE 60. AMAR DELUXE 24% AMAR GOLD 51% ST-5 0% AT RIB 3% XMR 22% CARGO MILLER 0% H.C.V BIAS FRONT Sales CHAMPION 2% CHAMPION GOLD 1% XT-7 HAULUG 2% XT-7 GOLD PLUS 22% XT-7 2% XT-9 0%XT-9 GOLD 13% XT 100-K 19% LOADSTAR SUPER 35% LOADSTAR SUPER XP 1% LOADSTAR SUPER GOLD 3% MINE LUG 0% H.C.V BIAS REAR Sales ENDURANCE MD 14% ENDURANCE LD 43% ENDURANCE CD 8% ENDURANC E MA 17% ENDURANCE MA 326 17% ENDURANCE RA 1% ENDURANCE MA731 0% ENDURANCE LDR 0% H.C.V RADIAL Sales NAMAN SHARMA - B.I.M.M PUNE 61. KAIZEN 77R 12% KAIZEN 99R 30% KAIZEN 99R PLUS 40% KAIZEN 100R 18% KAIZEN BIAS FRONT Sales KAIZEN 21L 14% KAIZEN 27L 9% KAIZEN 50L 32% KAIZEN XDT 22%...</p>