An insider's account of how Apollo Tyres went global and the ‘graveyards’ of Indian manufacturing

From the Licence Raj to liberalisation, labour unrest to global expansion – how did an Indian tyre company rise, fall, and rise again?

In this conversation, entrepreneur Udayan Dravid joins Abhinandan Sekhri to discuss his new book, Rise of the Phoenix: The Apollo Tyres story, an insider’s account of how Apollo Tyres transformed from a struggling manufacturer of the 1970s into a global brand. Dravid also unpacks India’s tryst with manufacturing and why it missed that bus to China.

Delving further into how Apollo Tyres turned its fortunes around, Dravid offers a crucial insight into how they redefined their business. Instead of selling tyres, Apollo sold “consumer vehicle finance”, recognising that truck tyres were sold on credit. This brought in financing companies as dealers and allowed Apollo to take deposits at high interest rates while raising prices, meaning competitors were essentially funding Apollo's expansion.

Dravid recalls, "When we started selling tyres, and we were largely in the truck tyre business, we said, we are not selling tyres. We are selling consumer vehicle finance. The moment you say we are selling consumer vehicle finance, you change the rules of the game completely because everyone else is selling tyres."

The company also hired young professionals from outside the tyre industry to bring fresh perspectives, requiring each employee to generate one actionable idea annually. He argues that corporate managers today prefer to hire ready-made talent rather than train young employees at a higher cost, which is precisely the opposite of what they did at Apollo Tyres.

On manufacturing, Dravid notes, “No sector can absorb the kind of labour force and improve the quality of life other than manufacturing. India is probably the only country that actually missed the manufacturing bus,” heading straight to a service revenue economy.

So, why did India miss the manufacturing bus? According to Dravid, "Without an ecosystem of capital availability, manufacturing cannot revive... You had (state-run) development financial institutions (DFIs), which took a very long-term view of investment. At that time, the IDBI's role was so critical. They supported the company (Apollo) despite taking crores in losses. And they continued to support [us]; they would give money to pay salaries."

He argues that the collapse and reinvention of DFIs like IDBI and ICICI in the eighties and nineties into private sector banks played a role in the collapse of manufacturing.

Industrial areas where MSMEs thrived, like Faridabad, Ghaziabad, and Noida, “were all created by these small people who are taking smaller loans, setting up smaller factories.”

“And the backbone of these state financial institutions came from IDBI and ICICI. They were partners in all of this. So when they went down, everything went down," he adds.

Once-thriving industrial hubs like Faridabad and Ghaziabad are now industrial deserts. “Thirty years ago, they were teeming with factories, and there were thousands and thousands of people employed over there in manufacturing. But they are graveyards today.”

Tune in for the full interview.

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