Davos 2026 | GST cuts, cricket sponsorship drive tyre demand in India; Europe remains a tightrope for Apollo Tyres

Apollo Tyres is heading into 2026 with strong optimism on India, even as Europe continues to test the company’s resilience amid weak demand and rising competition from low-cost Chinese imports, Managing Director Neeraj Kanwar said in an interview to CNBC-TV18 on the sidelines of the World Economic Forum 2026 in Davos.

Kanwar said India is shaping up as the key growth engine for the tyre maker, supported by GST cuts, improving consumer sentiment and aggressive brand-building initiatives, while Europe remains a market where survival and margin protection are the immediate priorities.

India set for double-digit growth

Apollo Tyres is expecting double-digit demand growth in India across commercial vehicles (CVs), passenger vehicles and the two-wheeler segment in 2026. Kanwar said GST reductions have left more money in consumers’ hands, translating into higher discretionary spending, including on vehicle maintenance and replacement tyres.

“GST has really helped consumers have more money in their pockets, which means they are spending more on tyres. Safety also becomes an important factor, as people were earlier postponing tyre replacement,” Kanwar said, adding that rising road accidents are pushing consumers to prioritise tyre upgrades.

The company has also been gaining traction in the two-wheeler segment, which it entered over the past few years, while the original equipment (OE) segment in India continues to remain robust. Kanwar said both the CV and passenger car segments are likely to clock double-digit growth in 2026.

Cricket sponsorship boosts rural reach

A key growth lever in India has been Apollo Tyres’ high-profile sponsorship of the Indian national cricket team. Kanwar said the association has significantly improved brand recognition, particularly in rural markets where building recall is traditionally challenging.

“Everyone watches cricket in India. Since October, we’ve seen a huge benefit in rural markets for passenger cars and two-wheelers. Distribution has expanded and market share has improved in several regions,” he said.

Kanwar described the sponsorship as an investment in national pride that also delivers tangible business outcomes, especially in semi-urban and rural India.

Europe remains a challenge

In sharp contrast, Europe continues to be a “very difficult” market, Kanwar said. Demand growth remains muted at around 1–2%, with the premium tyre segment under pressure as consumers increasingly opt for cheaper alternatives.

“We don’t see any clear indication of a revival yet. Budget brands are growing, while higher-end brands are seeing a decline because Chinese tyres are coming in cheaply,” he said.

Apollo Tyres operates in a niche, premium segment in Europe, focusing on ultra-ultra-high performance (UUHP) tyres of 17 inches and above. While the company is outperforming the broader market, profitability remains under strain due to limited volume growth and intense price competition.

Cost cuts, restructuring to protect margins

To navigate the European slowdown, Apollo Tyres is aggressively tightening its cost structure. The company has already begun reducing overheads and cutting advertising and promotional spends. A major margin lever will be the closure of its manufacturing plant in the Netherlands, announced earlier this year.

Production from the Netherlands facility will be shifted to Hungary and India, creating a lower-cost manufacturing base to service European demand. Kanwar said the transition is expected to be completed by June or July 2026.

“Moving production to Hungary and India will help improve margins over time. The cost structure will come down, making us competitive in Europe again,” he said.

At the same time, Apollo continues to invest in R&D and technology to differentiate itself from low-cost Chinese imports and protect its position in the premium segment.

Raw material costs stabilise

On input costs, Kanwar said raw material prices have largely stabilised. While there may be marginal increases of 1–2% over the next two quarters, he does not expect any sharp spikes that could materially hurt margins.

Also Read | Davos 2026: Apollo Tyres eyes double-digit growth in India, to shut Netherlands plant amid Chinese imports

Message to shareholders

Kanwar struck a confident note on the company’s long-term outlook, stressing Apollo Tyres’ strong foundations and focus on sustainable growth. As the company marks 50 years since its first hire in 1976, he said the priority remains building a resilient business that can withstand cyclical downturns.

“We are in a positive run. I see India and Europe growing with healthy margins over time, and that is what investors should focus on,” Kanwar said.

For Apollo Tyres, 2026 appears to be a tale of two markets — a high-growth India powered by policy support and brand strength, and a tightrope walk in Europe, where discipline, restructuring and patience will determine the next phase of growth.

Below is the verbatim transcript of the interview.

Q: 2026 bodes well for you. On the back of GST cuts, the auto sector in India has certainly got a bump up. What’s demand looking like?

Neeraj Kanwar: Well, I’m pretty bullish. As you know, I’m always optimistic. Demand is looking at double-digit figures. Apollo Tyres is doing very well in both the commercial segment and the passenger vehicle segment. Also, we entered the two-wheeler segment over the past few years, so we’re gaining market share. I think India, also on the OE side, is very positive. GST has really helped consumers have more money in their pockets, thereby spending more on tyres. It’s also a safety issue because people were still holding back on changing their tyres. Now they have extra money to change their tyres, so safety becomes another important factor, given that road accidents are increasing in India. So, I’m pretty bullish for 2026. Both the CV segment and the car segment, I see a double-digit growth.

Q: But Europe is a different story.

Neeraj Kanwar: Europe is a very, very challenging story, as we all know. Even in Davos, everyone is talking about how Europe is going to come out of this mess. It is a very difficult situation. We are keeping up with the pace of the market, but it’s only growing by one or two percent because we are a very niche player. We sell in the high segment of the market. We are selling more on the UUHP sizes, which are 17 inches and up. Profit remains a challenge because there’s hardly any growth, but we’re still above water. We are doing better than the market, but it still is a very tight situation.

Q: Any indication of a revival?

Neeraj Kanwar: I don’t see any indication as yet. We are seeing a lot of inflow of Chinese tyres coming in. That’s another problem. Budget brands are growing in Europe, while the higher-end brands are seeing a decline. So the middle and lower segments are growing because tyres are coming in cheaply.

Q: You talked about the Chinese threat. How big of an issue is that for you at this point?

Neeraj Kanwar: Well, for India, it’s fine. We have tariffs to block Chinese brands from entering. But in Europe, yes, it is a challenging time. So we’re trying to see how we can cut costs in order to compete with better technology. We are investing a lot in R&D and in building the brand to compete with Chinese brands in Europe.

Q: Raw material costs—your peers have spoken about them going up. What is it looking like for you?

Neeraj Kanwar: Well, right now, I think it’s stabilised. It had gone up, but in the coming two quarters, I see it staying at current levels, maybe going up by one or two percent, but nothing drastic.

Q: So what levers are you looking at to drive growth forward, given the uncertainty in Europe?

Neeraj Kanwar: Well, first, coming to India, as you know, we sponsor the India national cricket team in a big way. I think we’re doing very well.

I told some journalists before that I’m not one of those who build companies without a strong foundation. Since 1976, in fact, this is our 50th year—our first hire was in 1976—we have built the company on very strong foundations, with a set of 20,000 people and families that we have to look after. We are here to stay. That’s all I want to convey.

To build the brand, we’ve invested in the cricket team, and that’s a huge source of pride for us. It’s not only Apollo investing; Apollo is invested in the country’s pride, which brings the nation together, especially hopeful that they win the T20 World Cup. But since October, this has given us a huge benefit in rural markets for passenger cars and two-wheelers. In rural India, brand recognition is hard to achieve. Today, everyone watches cricket, and we’ve seen expansion and distribution increase in India, especially in markets where we are gaining market share.

Coming to Europe, the challenge is cost savings on our overheads, which we’ve already started, and reducing A&P spending on advertising and publicity. By looking at our overall cost structure, we will also benefit from the closure of our plant in the Netherlands, which we announced earlier this year. Most of the production will be moved to Hungary and India, allowing a low-cost base to feed into a higher-profit pool, so margins will increase. It’s a matter of time. We’ve already announced it; hopefully by June or July, we’ll be done with the Netherlands factory. I see the cost structure coming down, making us competitive in Europe again, which is the next driver for us.

Q: What should shareholders look forward to? You talked about the divestiture of the Netherlands plant and how that could aid margins going forward.

Neeraj Kanwar: We are in a positive run I would say. I see India and Europe growing with healthy margins, and that’s what investors should focus on.