ATLANTA—Apollo Tyres Ltd. has taken one of the first major steps to increasing its presence in the U.S.—relocating its North American corporate headquarters to Atlanta from Metuchen, N.J.
The move becomes effective on June 1.
The relocated Apollo Vredestein North America office is on the 10th floor of a new complex in Midtown, the second largest business district in Atlanta. It is situated between the commercial and financial districts of downtown Atlanta. The facility features both shared and private office space and the company as access to multiple conference rooms, meeting rooms and open lounges.
The Gurgaon, India-based tire maker said the decision to relocate to Atlanta was driven in part by the lower cost of living which was an advantage for associates. The proximity to potential original equipment customers and the overall economic growth in the area were also factors.
Apollo said the new location is within close proximity of Atlanta's Hartsfield-Jackson International Airport.
Steven Smidlein, the former Goodyear and DaimlerChrysler executive hired in March 2016 as Apollo's senior vice president for North America, will oversee the facility. Smidlein has been working over the past year to lay the foundation for Apollo's move to bolster its U.S. presence.
For the time being, Smidlein will be the only Apollo employee who relocates to Atlanta. The office will have five employees, according to Smidlein, and it will add associates as sales and distribution grow in the market.
Apollo currently has five regional sales managers in North America: two in agriculture and industrial sales and three in passenger tire sales.
The New Jersey office will close permanently at the end of June.
Less than a month ago, Apollo inaugurated a state-of-the-art tire plant in Gyongyoshalasz, Hungary, the tire maker's first greenfield plant located outside of India.The plant—Apollo's sixth worldwide and second in Europe—has the capacity to produce 5.5 million passenger and light truck tires and 675,000 commercial vehicle tires per year once Phase I is complete.
During the plant opening, Neeraj Kanwar, Apollo's vice chairman and managing director, said his firm would turn its attention to increasing its presence in North America, specifically the U.S. and Canada.
"The U.S. plays a real important part for us in our growth strategy," Kanwar said. "Given now that we have two domestic markets, which is largely Europe and India, our next stop has to be the U.S."
Kanwar said Apollo needs to have product available to cover 70 percent of the North American market in order to enter the U.S. successfully. He said Apollo currently has product to service only about 5 percent.
Apollo will use the Vredestein passenger tire brand as its main U.S. product. Once that is established, it plans to introduce the Apollo brand for heavy commercial trucks.
Once a the company creates a market and brand, Kanwar said the next step is "setting up a tire factory."
"Now, I'm talking four to five years," he said. "But the whole thing is to create the market for the U.S. customer, and that is what Steven and his team will do."
Kanwar said his company already has looked at three or four states to consider as sites for a new plant but said it's "too early" to disclose specifics. His goal is for 10 percent of Apollo's revenue to be driven by the North American market within five years.
Apollo's largest tire factory is located near Chennai, India, one of four it has in the country. Those four have the capacity to produce 1,450 metric tons of tires per day, and the fifth facility in the Netherlands produces another 195 tons per day.
Apollo, the world's 17th-largest tire maker, has more than 16,000 employees worldwide, with sales of $1.8 billion in the 2015-16 fiscal year. Europe accounts for about one-third of Apollo's global sales.