Facing robust market demand and near-maximum capacity utilization, global tire manufacturer Apollo Tyres Ltd has officially announced a capital expenditure (Capex) of ₹3,500 crore (approx. RMB 30 billion) for Fiscal Year 2027 (FY27), aiming to comprehensively accelerate its capacity expansion.
Urgent Need for Expansion Amid Capacity Constraints
Gaurav Kumar, CFO of Apollo Tyres, revealed that the company's capacity utilization across its India and Europe plants reached as high as 90% in Q4 FY26. Given the current supply-demand imbalance, expansion has become an imperative choice.
Of this massive investment, approximately ₹3,000 crore will be allocated to India, focusing on expanding capacity for both truck and passenger car tires. The remaining ₹500 crore will be directed toward the European market to continue advancing the passenger car tire expansion project at the Hungary plant.
Strong Demand, Undeterred by Challenges
Despite cost pressures from raw material inflation and geopolitical factors, Apollo Tyres continues to deliver impressive market performance. In Q4 FY26, both the replacement and Original Equipment Manufacturer (OEM) segments in India achieved double-digit growth.
To counter rising costs, the company has announced a price increase of 6–8% for the current quarter to safeguard healthy profit margins. Kumar stated, "Current market demand remains robust, making the FY27 expansion plan imperative. We will continue to upgrade our capacity to ensure a consistent supply of high-quality products for our customers."
Industry Trends
The current high capacity utilization is not unique to Apollo but reflects the broader boom across the entire tire market. Capacity expansion has become an industry-wide consensus. Competitor CEAT, also facing capacity utilization exceeding 90%, plans to increase its capital expenditure by approximately 25% in FY27. With major players like Apollo Tyres making significant investments, the global tire market supply landscape is poised for a new round of reshuffling.
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