On the road to recovery and success

These are, no doubt, unprecedented times. Businesses across sectors and continents are finding ways to survive and live in the “new normal” amid the COVID-19 pandemic and its impact on the economy. Business and political leaders have to make incredibly tough decisions. 

So, what should business do?

Some may be forced to reduce investment, freeze hiring, or avoid entering new markets, but others may find opportunities to adapt and grow. What one must consider is the long-term repercussions of our short-term tactics.

It is now more important than ever for leaders to be agile, decisive and strategic.

We faced tough decisions such as having to close factories during the lockdown, cancelling launch of new products at trade fairs and international events, and facilitating working from home for all our employees. However, we did manage to adapt and move quickly. This has helped us not only entered new markets and launch new products during the pandemic but also post a return to profits after a difficult Q1.

Entering the US market

Even though the auto sector witnessed a sharp decline in automotive sales, the global market for tyres looks robust. It is forecast to reach 2.7 billion units by 2025. The United States is a key tyre market valued at USD 62.55 bn in 2019 and is forecast to reach USD 84.05 bn by 2025 on account of the growing automotive industry and reduction in tariffs. The country is home to leading global automobile brands, component companies and has an expanding consumer base. So, at Apollo Tyres, we saw it as an important market - especially in the premium tyre segment.

Our decision to offer a full scale ‘Vredestein’ portfolio has been a good one aided by tremendous test results and sales. 

 In fact, we have launched a complete line of ultra-high performance tyres for North America’s diverse geography and regional climates including our high-performance tyres like Hypertrac, Wintrac Pro, Ultrac Vorti etc aimed at some of the most popular premium vehicle segments like sport sedans, coupes and SUVs. We have plan to introduce the Vredestein Pinza, our first-ever dedicated pick-up truck and SUV tyre in America.

Changing tactics

Like most companies in the sector, in the pre-COVID-19 days, we relied a lot on trade fairs and showrooms for our product launches and market entry strategies. We had to scrap this because of COVID-19. We changed gears quickly and focused on digitisation. Everything from training to sales went online. We invested in a seamless transition to the digitisation for marketing that enabled us to have successful product launches in several markets including the US. The team executed a successful launch of the Vredestein brand in the US with a digital marketing campaign that delivered a higher than projected ROI. 

 Business Strategy

When the sales dipped as a result of the onslaught of COVID-19 and lockdowns, we had to make some difficult decisions. We made a call to divide our costs into good and bad costs. We continued investing in good costs such as R&D, brand building and on employees; while identifying bad costs and reducing them, like unnecessary infrastructure, business travel, and large-scale product and facility launches. With the increased demand from all market segments, the plants have been running at healthy utilisation levels, with necessary safety precautions. 

We made a call to divide our costs into good and bad costs. 

 Though we first entered the premium car segment in the US, we have plans to expand into the truck segment. Yes, these are challenging times, but creating business resilience, agility and digitisation has paid off for us.