21 August 2013
MUMBAI: Making apparent its global ambitions, India's second largest tyre makerApollo Tyres on Wednesday announced that it is tying up with Manchester United, to become the football club's 'official tyre partner' in UK and India.
The company did not disclose the financial consideration of the tie-up.
The new initiative with Manchester United will see Apollo produce football based play zones constructed from used tyres. These rubber-based pitches will be open to young people from local communities in the UK and India, with the aim of encouraging them to take up sports and have a more active lifestyle.
While the Apollo Tyres logo would not sport on the Manchester United Jersey, the Indian company's logo will be there on the club's website and Apollo Tyres will be free to use certain players of Manchester United for their marketing and promotion campaign.
The Indian tyre maker's global ambitions took a huge leap when it announced in June, its plan to acquire US -based Cooper Tire for $2.5 billion.
Speaking about the tie-up, Onkar S Kanwar, chairman, Apollo Tyres Ltd said, "This is a very important partnership for us as a company and clearly demonstrates our global ambitions for our business, and the brand. Very few sports platforms deliver a global profile and awareness and we believe the impact of this relationship will be significant in helping to make Apollo a globally recognisable brand."
A key element of the partnership will be a joint community commitment to encourage healthy lifestyles and develop sporting skills in young people. Drawing on the company's heritage and established CSR programmes.
Prior to Cooper Tire acquisition, Apollo earned 65% of its revenues from India, 23% from Europe and 13% from rest of the world, but post the acquisition the revenue from the three geographies will change. On the completion of the acquisition, Apollo will get 43% of its turnover from North America, 22% from India, 18% from China, 12% from Europe and balance from the rest of the world.
A tyre industry analyst on a condition of anonymity said, "With the kind of widespread distribution, Apollo Tyres will have to look at taking the brand on a global scale. The tie-up with Manchester United is a step in that direction. With this tie-up, they can leverage on Manchester United's strong fan following in India and UK."
The analyst however cautioned that the move would definitely help the company in building the brand, but they will have to do it in a very cost effective way, considering the debt on its book post the Cooper acquisition.
To be sure, while India comes 10th as a country that loves Football in a global study, another Nielsen survey in 2010 found that 47% of India's 1.2 billion population would describe themselves as football fans.
Not only will Apollo and the football club provide kids with a safe soccer pitch but will get kids "offline" again, playing and socializing outside & motivating and triggering kids to get active, work on their soccer skills based upon the 10.000 Hour Rule to mastery and health.
The first of these pitches will be built within the grounds of Old Trafford and include some specific Apollo 'Go The Distance' skills challenges, before they are rolled out across the country and then in other markets around the world, the company said.
According to Alpana Parida, president at DY Works, a leading brand firm, it is a smart move by Apollo Tyres. The tie up will attract attention of young male audience, who is increasingly interested in football.
"It is a brilliant move. Rather than simply rubber stamping the logo, Apollo is actually engaging with audiences with such grassroots initiative, which will have a greater impact on the brand image. The tie-up has a potential to build deeper relationship with young people. It will pay off for the brand and this could lead to customer acquisition instead of just customer awareness and builds a long term relationship with the brand," added Parida.
Kanwar expressed pride of introducing a new healthy living initiative under our corporate social responsibility (CSR), to create new play zones for the youth in the UK and India. "In its aim to stimulate the next generations to go the distance, this association really brings to life our brand values of high performance, quality and excellence,"added Kanwar.
Commenting on the tie-up, Manchester United Group MD, Richard Arnold said, "Apollo Tyres is a leading player in the tyre industry and its rate of growth and development into new territories made it an attractive partner for the Club. With a combined fan base close to 46 million followers in both the UK and India, we are confident in providing Apollo with a captive audience.
"This partnership will allow Apollo not only to promote its brand, but also to engage and communicate with our fans, like we observed today with the skills demonstration.
"Manchester United is dedicated to youth investment and development, whether through our Academy or via the work we do in the community," added Arnold.
Published by: The Economic Times