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00:00The Consumer Affairs Minister speaking on the GST reforms, but how will the GST reforms really impact the tire sector?
00:09Let's get on board Neeraj Kanwar, who is the Vice Chairman and Managing Director for Apollo Tires, who is now joining us.
00:15Hi, Mr. Kanwar. Thank you so much for taking the time out and joining us today.
00:19Mr. Kanwar, with the GST cut coming into effect today, how much of a demand uptick do you foresee with Apollo cloaking mid-to-high teens growth?
00:29In line with your double-digit growth guidance.
00:34Well, firstly, I'd like to commend the government under Shreemodiji.
00:39I think it's a very good simplification of the GST slabs.
00:44I think also the government has given back to the consumer some extra money so that they can spend.
00:51And as far as tires are concerned, obviously the tires are going to become cheaper and much more affordable.
00:57And that makes it more sense for people to go and change their tires.
01:01So our roads will become safety.
01:04We will become safer because once you get new tires, then there will be less accidents on the road.
01:11So it's a good 360-degree move by the government.
01:14I think this is a good stimulus to really grow the economy and grow the demand, especially in the automotive sector.
01:23And I see, again, like you said, I see Apollo also shining in this new GST simplification as we are passing on the entire benefit to the end consumer.
01:34And we will be also looking at gaining market share.
01:39Given that we've done this brand also and given GST also, we are leaders in the truck segment and in the car segment.
01:46So we just hope we are going to gain more market share.
01:50Yes, and I'm optimistic about the double-digit growth figure that you have mentioned.
01:54But we want to see how it all pans out after the 22nd of September.
01:59Mr. Kunwar, what is the outlook segment-wise, OEM, replacement, where do you see the strongest traction?
02:09Clearly, it will be in the replacement market.
02:12But we are already getting signs from the OEMs of healthy growth.
02:17So they are firstly talking about a single-digit, high single-digit growth, especially in the CV segment.
02:23Also, passenger car segment, there is a growth coming.
02:26So it will be driven by the OEMs, but actually the replacement will take major component of the extra growth.
02:35Right. Also, you know, the ATMA sees the tire industry growing at 12 times by 2047.
02:42Which segments do you see leading Apollo's growth in the near and the midterm?
02:47I think the main drivers of growth are going to be the car segment and the CV segment.
02:52Given that the government is focusing a lot on infrastructure, there is a lot of money going into infrastructure.
02:59A lot of foreign direct investment is coming into infrastructure.
03:02So the trucks have to move for construction.
03:06And therefore, I believe that the CV segment is going to grow in a very big way.
03:11Also, passenger car is going to grow in a very big way.
03:14So all in all, I think even the farm segment, agri segment is doing very good.
03:20So I think all in all, all segments of the auto industry will grow.
03:25As we are a player in all the segments, equal share will go into all the equal baskets of various tire products.
03:33Also, Mr. Kanwar, how are the exports shaping up amid global supply chain shifts?
03:40Do you think export contribution rising meaningfully in the next two to three years?
03:46Yes, I do, because currently we are down from a high of 18 to mid-15s.
03:55We are hoping to come back to 20% of export.
03:59And given that our focus is in the U.S. market, Europe is having a downturn right now as far as the economy is concerned.
04:06But Fredestein is doing very well in the European market.
04:11So we are gaining market share in the higher segment of the car market in Europe.
04:16So we are very bullish of exports.
04:20And we hope that we are able to achieve our figures of export from India.
04:26Right. Also talk to you about the raw material costs that are benign.
04:31What sort of trends are we seeing there?
04:33I think we have seen the highs of raw material.
04:39I think they are now going to flattish out.
04:42And they are going to have a little bit, they will come down as far as natural rubber is concerned.
04:50And then they will flat out.
04:53All right, Mr. Kanwar, thank you so much for taking out time and joining at this hour.
04:58With this, it's time to take a very quick break.
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