VOL. 50 ISSUE 29 JULY 23, 2013
P31
AVON ACQUIRED BY INDIA'S APOLLO
B
ritish tire manufacturer Avon Rubber is in
the process of being acquired by India's
largest tire producer, Apollo Tyres. In a cash
deal valued at $2.5 billion, Apollo has agreed
to purchase the American parent company of
Avon, Cooper Tire & Rubber Co., the USA's
fourth largest tire manufacturer that acquired
the historic British company in 1997. Once
completed, this will represent the largest single
takeover of any American corporation by an Indian company – so far.
Avon began manufacture of pneumatic tires
and other rubber components for early motor vehicles and bicycles at Melksham, in the
southwest of England, as long ago as 1904.
Melksham is still its headquarters today, and the
company's range of motorcycle tires covering a
broad range of models is sold around the globe.
The company has also enjoyed a long and
distinguished history in motorcycle racing on
two and three wheels after manufacturing its
first motorcycle tire in 1911. Champions such as
Geoff Duke, John Surtees and Mike Hailwood
all won successive World Championships on
Avon. Avon tires have also dominated historic
bike racing worldwide for many years, with every Goodwood Revival and Manx Classic rostrum completely filled with Avon-shod motorcycles for the past 10 years.
Apollo's takeover of Cooper (which does not
otherwise manufacture street motorcycle tires)
- and thus its subsidiary Avon - is aimed at giving
the Indian company an improved global penetration, as well as savings of up to $70 million
annually in terms of rationalizing joint operations, sourcing from suppliers, and streamlined
manufacture, according to its VP & Managing
Director, Neeraj Kanwar.
Even before the takeover, Apollo already exported to 117 countries worldwide, and already
has a plant in the Netherlands. The move has
turned Apollo into the world's seventh largest
tire manufacturer had sparked concerns that
jobs may be at risk at the Avon factory in Britain, but Kanwar has denied this.
"Like all other facilities around the world, we
are not looking at closing Melksham," he said.
"It is a profitable operation that adds significant
value to the overall operation."
It remains to be seen, though, if Apollo will
commence manufacture of Avon tires in India,
to meet the growing demands of its burgeoning
home two-wheeled market, and its increasing
emphasis on higher performance and higher
quality home-built products.
The Indian market includes the various KTM
Duke models already being built in the Bajaj
factory in Pune, the forthcoming BMW models
being developed in India in conjunction with
the country's number-four manufacturer, TVS,
and, indeed, the bikes that will begin to flow
in 2015 from the giant new Triumph factory
at Narasapur, outside Bangalore. Equipping
them with locally sourced tires with the Avon
name on the sidewall might well be seen as a
means of adding extra value to a product which
is bound to be promoted as the best of British,
made in India.
Alan Cathcart
