“FY20 was a tricky yr by all measures. Whereas the auto business had been on a sluggish progress path even in FY19, the final yr proved to be an entire dampener for the business as a result of poor shopper sentiment, elevated value of possession on account of upper insurance coverage value, and better financing value owing to the liquidity disaster within the non-banking monetary firm (NBFC) sector,” Kanwar mentioned in his tackle to shareholders within the firm’s annual report for 2019-20.
He, nonetheless, mentioned the corporate remains to be bullish in regards to the financial system bouncing again and “did see indicators of a restoration within the third quarter, however the fourth quarter witnessed headwinds within the type of the COVID-19 outbreak and the following nation-wide lockdown”.
“India noticed its financial progress hitting an 11-year low of 4.2 per cent for FY20, even because the auto business gross sales fell 18 per cent, adversely impacting your entire tyre business, which, in flip, declined by eight per cent, by way of complete tyres manufactured,” Kanwar mentioned.
Wanting forward, he mentioned “it’s cheap to imagine that the uncertainty will proceed. I personally don’t see an early finish of this ‘new regular’. But, the present should go on and we’re already adapting and discovering alternatives for progress.”
Kanwar additional mentioned the corporate’s quick precedence is the security and well-being of its staff, even because it continues to make the “‘new regular’ our regular”.
Regardless of the disaster, he mentioned, “We’ve been capable of organise the digital inauguration of our seventh manufacturing plant in Andhra Pradesh, India in June 2020.
“This was intently adopted by the opening of our facility to fabricate high-end bias and metal radial tyres for the two-wheeler phase in Limda, Gujarat, India in July 2020.”
On the general outlook, Apollo Tyres mentioned in opposition to the grim world, Indian and European outlook, it has adopted a cautious method.
“The main target is on worker security and conserving money. The corporate is re-engineering manufacturing and reducing down all avoidable prices and specializing in the great prices like R&D, e-training and model constructing, amongst others,” it mentioned.
COVID-19 has grave penalties for the auto business and all associated sectors, with most vehicle producers having introduced momentary closure of vegetation as a result of collapsing demand, provide shortages and authorities measures.
“OEMs (unique tools producers) in India are forecasting a de-growth of 30-40 per cent in FY21 demand given the BS-VI implementation and value improve, COVID-19 impression, poor shopper sentiment and liquidity crunch, which in flip will critically impression the tyre business,” the corporate mentioned.
Apollo Tyres Vice-Chairman and Managing Director Neeraj Kanwar mentioned, “Wanting forward at FY21, we’re conscious that the COVID-19 pandemic and the lockdown may have severe implications on the enterprise. It has been a tough few months for us – having to quickly shut our vegetation and making robust choices on cost-cutting throughout the board.”
Nonetheless, he mentioned the corporate is taking a look at challenges as alternatives and has already launched a number of initiatives beneath the DRIVE management theme to re-engineer Apollo Tyres.
“We’re studying from the pandemic expertise and can make this our new regular as we energise your entire firm to attain increased productiveness,” he mentioned.