On Leading One of the World’s Largest Family Businesses: A Conversation with Neeraj Kanwar (Vice-Chairman & MD of Apollo Tyres) and his father, Onkar Kanwar (Chairman of Apollo Tyres).

How to Lead a Global Family Business: A Conversation with Neeraj Kanwar (Vice-Chairman & MD of Apollo Tyres) and his father, Onkar Kanwar (Chairman of Apollo Tyres).

Apollo Tyres Ltd. is one of the world’s largest family businesses. Founded in 1972, Apollo now has over 19,000 employees, serving 100 countries. Neeraj Kanwar is the grandson of founder, Ranuaq Singh. He became MD in 2009 (in his mid-thirties) and has led the growth of Apollo from revenues of US$450 million to over US$3 billion; Apollo is on track to reach US$5bn in revenues by 2026. Neeraj continues to work closely with his father, Onkar Kanwar, who is the company chairman.

The company markets its products under its two global brands – Apollo and Vredestein, sold through a vast network of branded, exclusive and multi-product outlets – today, the product portfolio of the company includes the entire range of passenger cars, SUV, MUV, light truck, truck-bus, two-wheeler, agriculture, industrial, speciality, bicycle and off-the-road tyres, and retreading material and tyres. Apollo has been consistently ranked as one of the best companies to work for in Asia and Europe and has pioneered initiatives in corporate social responsibility, sustainability, and philanthropy.

In this interview, I speak to Neeraj Kanwar, Vice-Chairman & MD of Apollo Tyres and his Father, Onkar Kanwar, Chairman of Apollo Tyres. We discuss the complexities, challenges and opportunities of running one of the world’s largest family businesses including effective succession planning, leadership, culture and change.

Q: Can you tell us about your career?

[Onkar Kanwar]: Firstly, I appreciate your interest in this discussion. I want to begin by sharing how my journey started with this company, which was founded by my father. The company was on the verge of bankruptcy, operating within the vibrant state of Kerala. Upon my arrival, I found myself facing the militant unions and their chants in a language I only vaguely understood. I knew then that I was in for some serious challenges. Not only did we lack funding and morale among the workforce, but we were also lagging technologically.

The first task at hand was motivating my team and providing a clear vision for our future, despite my limited knowledge of tyre manufacturing. I relied on my previous experience of managing people in a large firm, which was also my father’s business. It was not an easy task to instil confidence in a dedicated workforce who were sceptical about delivering results. Yet, I was determined to convince them that we were on the path to becoming a major company.

While trying to understand the industry, I noticed a significant number of tyres being returned. Upon inquiry, I learned that we were using American technology, suitable for American roads but not Indian ones. So, the next step was understanding the market, and we went to the field, spoke to the truckers and understood their requirements and expectations. This led to the development of new tyres.

As time passed, we witnessed the transportation scene in India evolving from rail to road, making it predominantly a truck market. This transformation coincided perfectly with our improved tyre technology, and then there was no looking back for me and Apollo Tyres.

Of course, the tough part was also dealing with the financial institution. We were on the verge of bankruptcy, and the financial institutions which supported us were fast losing patience. I aimed to gain back the trust of banks and other institutions. We ensured financial discipline, and within a short time, we were exceeding the cash flow expectations I had projected. We saw renewed interest from them, and I must say that their trust in Apollo Tyres has never wavered, and neither have we let them down.

The other area in which I worked continuously and consistently was communication. This was an integral part of my job. With the company steadily improving, it was time to expand. We set up another factory in Gujarat, inaugurated by our Prime Minister, then the Chief Minister of Gujarat.

By the time India was opening up in 1990, we were ready to take our company global. In 2006, we had the opportunity to purchase Dunlop in South Africa. Although it was a challenging start, we eventually made headway in Africa, Europe, America, South East Asia, and South America.

By 2009, my son Neeraj had joined the company, marking a new beginning. We continued to expand, setting up two factories in India in 2011 and one in Hungary within a period of a decade and expanding capacities in the existing plants. Our conviction in the tyre business helped us to commit large investments even when companies were shying away from such commitments.

In addition to our business growth, I always emphasised the importance of instilling family values within our organisation. This involved developing trust and building confidence among our employees. As we expanded, we also improved our employee benefits, offering subsidised cars and housing loans. We also started providing health care benefits.

During this time, my son and other longtime professionals began to take on more responsibilities, managing different functions. I decided it was time to take a step back and let them take the reins.

Throughout my career, my vision for the company has not changed – creating an institution. I find this the most challenging task, not just getting in the sales and growing year on year but creating an institution that is considered part of the family by those within it.

Throughout our growth, we never lost sight of our corporate social responsibilities. Long before it was mandated by law, we had already been engaging in community services. We started our CSR work with a focus on our customers – the trucking community, offering them health checkups and, later, vision care. Later we expanded to other areas, including the communities around our plants and prioritised women’s livelihood and empowerment, investing in water treatment facilities. Along with these, we now focus on sustainability, aiming for carbon neutrality.

Overall, our journey has been about overcoming challenges, pushing boundaries, and making the best of opportunities while taking care of our people and the planet. We are now focusing on digitalisation, artificial intelligence and machine learning to further improve our productivity. Despite the difficulties and uncertainties, we are committed to continuing on this journey with the same passion and dedication that has brought us this far.

Q: What are your thoughts on succession?

[Onkar Kanwar]: My conviction has always been that it’s crucial to operate this business as an institution; I don’t have to always be glued to my chair. I could relinquish it. Neeraj was a youthful individual who had an engineering degree, and he had worked in our factories and marketing department. I recall an incident where Neeraj, whom I entrusted with the marketing department, encountered a crisis. He approached me, asking what he should do, to which I responded, “You’re the boss. Why are you asking me?”

Later that night, he called me as we lived close by. We’ve always maintained the idea that even after marriage, children need their personal space. He informed me that his team was unhappy with a decision he made. I suggested that we discuss it the next morning.

The next day, I invited his two deputies to join the conversation. I asked them about their thoughts on his decision, questioning if he did a poor job by contemplating letting everyone go from a certain department under his leadership. One of them, Satish, suggested firing only one person, which I felt was subjective. I prefer objective decisions.

We eventually decided that it would be better to request letters from the team, making it an objective process rather than just letting everyone go. This decision gave him confidence and allowed him to explain his actions to his team effectively. This approach allowed for a smooth transition of employees from the other office.

Similarly, I got Neeraj, started in finance, beginning in a small office. As he demonstrated an aptitude for each of these responsibilities, he took on more. Today, I’m extremely proud of his exceptional performance, even surpassing me in many ways, which brings me immense pride.

Q:  What’s unique about India that creates entrepreneurs?

[Onkar Kanwar]:  I believe that our inherent Punjabi trait is entrepreneurship. The defining factor for entrepreneurs is their willingness to embrace risk, and I was one such individual. My father embarked on his journey with nothing, eventually establishing a partnership and beginning his venture as a trader from scratch. So I understand that the potential, that DNA, is present within us.

I recognised these traits in Neeraj as well. He demonstrated an eager desire, an unspoken spark, and excelled when he was working within the factory. He made efforts to comprehend the operations and to identify the areas we were not adequately addressing. I observed that he had a knack for people management and built an excellent rapport with them. These are fundamental qualities – managing people and finances effectively.

I am confident that I’ve handed over the reins of the company to a competent individual who will further establish institutions. His taking charge brings me a sense of contentment, even when I am not directly involved.

Q:  What does legacy mean to you? 

[Onkar Kanwar]:  My hope is to ensure that our family values are upheld, that our employees have a genuine passion for their work, and that they feel a sense of ownership towards the company. I want our leaders to have a real desire to guide the team forward. It would bring me immense satisfaction, even in my absence, to know that the company continues to grow and is regarded highly. It is important that our team enjoys their work environment and feels integral to our collective success, and that’s a conviction I hold dear.

Q: How did you prepare yourself to join the family business?

[Neeraj Kanwar]: I can’t say that I was ready or even aware that I’d find myself in the tyre industry. After completing my education, I spent a year in New York working in a bank before returning home to manage a non-banking finance company, an opportunity that came to me thanks to my father’s insistence on understanding money management, especially since my background was in engineering. To be honest, I lost money in that venture. Slowly, I transitioned into Apollo Tyres, starting out as a marketing trainee. Never in my wildest dreams did I envision the level of success that would come my way. There was no long-term planning, no envisioning a 10 or 20-year trajectory.

When I joined, the company’s value was hovering around 200-250 million, and it was purely a single-product company, dealing solely with truck tyres. As time went on, I bridged the gap between manufacturing technology and customer needs, a link I believed was absent during the 90s. It was in 2004 that we boldly ventured into the technical side of things. Until then, we relied on our collaborators for expertise, but we decided to take the bull by the horns and become our own technological force, producing our own tyres. From that point, there was no looking back.

[Vikas: …and how did you decide how to balance the DNA of the business with your own approach?]

[Neeraj Kanwar]: The key influencer, as you may have gauged from your interview with my father, has been the ‘Apollo One Family’ ethos. It’s the very lifeblood of our organisation. I believe it’s something that is ingrained in each one of us, and we greatly value it. Moreover, he’s been a strong advocate of two other principles – transparency and communication. These have remained integral to Apollo’s culture.

What I’ve been able to infuse into this ethos is the philosophy of ‘work hard, play harder’. We believe in having fun while working, we relish each other’s company, and we regard ourselves as a family or a group of close friends. It’s not just all about work. We also find time for fun and laughter. This unique culture I’ve introduced, I believe, has fostered unity among us and has steered us towards focusing on the business, propelling it forward.

Q: What has been the digital transformation and technology journey of Apollo?

[Neeraj Kanwar]: Let me begin with technology, a critical aspect for us. Technology and brand served as our primary pillars. Our approach was to invest in a technically sound product, fortify the brand, and let the customers be drawn in naturally, a pull rather than push dynamic. A significant chunk of our investments went into R&D, employing around 400 scientists split between India and the Netherlands. Currently, 3% of our net sales, a number akin to top Indian companies, is devoted to R&D. The rewards of these investments are evident in the acclaim our products receive in German test tracks and publications. We take pride in our ability to compete with the best in the European markets.

In India, our technological advancements in truck tyres have propelled Apollo Tyres to the top of the truck radial market. With the rise of electric vehicles, we remain committed to investing in technology to ensure our tyres are robust and compatible. Both Apollo and Vredestein have introduced tyres for electric vehicles in Europe and India.

Turning to digitalisation, we embarked on this journey two years ago, prompted by the pandemic, when we recognised our relative weakness in the digital realm. We brought on board a Chief Digital Officer here in the UK, which marked the beginning of a transformative period. We’ve collaborated with several universities, including the University of Glasgow and one in Hungary, to advance our capabilities in artificial intelligence and machine learning over the past two years. These efforts have proven fruitful, leading to nearly a 20% increase in our productivity in Hungary.

Our focus is to elevate our production while maintaining our eco-footprint. To that end, we’ve set up two technical innovation hubs, one in the UK and another in Hyderabad, where we’re continually innovating in machine learning and AI. We’ve incorporated sensors in our tyres to better understand customer behaviour, an essential part of our digital journey.

Finally, the pandemic also highlighted the significance of the supply chain, a challenge that persists. Ensuring a seamless connection between our customers, production planning, and raw material sourcing is crucial. For this, we’re employing digital tools.

Q: What have been some of your key learnings around scaling a business? 

[Neeraj Kanwar]: Back in 2005, I led a high-level team on a retreat into the Indian mountains. There, with the guidance of a close friend and former chairman of BCG who attended in a personal capacity, we underwent a three-day workshop to envision a five-year plan. Our goal was to transform our $450 million company into a $2 billion enterprise by 2010. The strategy hinged on three key pillars: technology, people, and our brand.

In 2006, we ventured into South Africa, marking Apollo’s first expansion outside of India – a journey that came with many enlightening experiences for me. Then, in 2009, we acquired Vredestein, a Dutch company with a history spanning over a century, bringing with it a fresh set of challenges.

For me, the greatest challenge was instilling a sense of focus and infusing Apollo’s dynamic and flexible DNA into our various global operations. We had to assimilate cultures from South Africa, throughout Europe – including Germany, the Netherlands, Italy, France, and the UK. This process of cultural integration is ongoing, not a one-time solution, as melding cultures and people continue to pose challenges.

The success of a merger, acquisition, or business expansion hinges on how effectively you can intertwine and unite these diverse cultures. This integration is crucial for a global company like ours, with seven factories worldwide. An integrated approach and cohesive team are essential to confront the challenges of today’s global market.

My father has been a consistent advocate for change and the significance of time, and his support and faith in me have been invaluable throughout this journey. In the organisation, there were seasoned individuals and long-standing employees. My task was to inspire and motivate them to join me on this ambitious journey. From the outside, it might have seemed that this young man had gone mad, envisioning the company’s leap from $450 million to $2 billion within five years. However, the company stood by my focused vision, and we had a well-defined plan to achieve our goals.

This wasn’t a whimsical thought; we had a clear roadmap, and it was incumbent on everyone to fulfil their roles. It was made unequivocally clear by myself and my father that anyone who served as an impediment would be promptly shown the door. Our operations accelerated, with decision-making becoming swift and efficient, devoid of unnecessary bureaucratic layers. We were in an intensely dynamic situation, and this environment propelled us to grow and progress at a rapid pace.

Q: How have you led your sustainability journey?

[Neeraj Kanwar]:  We’ve been involved in Corporate Social Responsibility (CSR) efforts since 2000, and when sustainability became a focal point, it was a natural progression for us. We recognised early on the growing AIDS crisis in India, which, in absolute terms, was surpassing South Africa’s rates. Intriguingly, 60% of the AIDS patients were our customers – the truck drivers, who spend most of their lives on the road, often without adequate education. This led us to establish clinics across trucking centres in India. Now, we operate more than 35 medical centres, providing AIDS education, creating awareness leaders, and supplying necessary medication.

We also expanded into eye care, recognising the rampant issue of drivers not wearing glasses while driving, contributing to a significant number of accidents. Beyond these health initiatives, our CSR efforts have encompassed working with local communities near our factories, women’s empowerment, water conservation, and reducing carbon emissions.

With our existing commitment to CSR, adopting sustainability strategies two to three years ago came naturally to us. Our company culture was already aligned. We had been implementing water conservation measures and addressing carbon emissions at our facilities, which was simply taken to the next level with sustainability in focus. Now, we have a clear agenda: we aim to achieve carbon neutrality by 2050, significantly lower our energy use, and switch to renewable energy sources with a target of around 35% by 2030, a goal we are already approaching with a current rate of 25-26%. We are addressing Scope 1, 2 and 3 emissions, striving to do our utmost.

Another objective we’ve set is for 40% of our raw materials to be sustainable by 2030. Through collaborations with universities in Singapore and India, we are continually learning and exploring ways to better serve the broader society. As an example of this commitment, we’ve already produced a prototype tyre that is 75% sustainable. We remain focused on furthering such initiatives.

Q: How do you stay motivated as a leader?

[Neeraj Kanwar]: We haven’t yet reached our goal, which is to become a $5 billion company by 2026. We’re currently at the three billion-dollar mark. Another significant challenge we’ve accepted is to improve our balance sheet ratios, enhancing their overall health. I aspire to see Apollo evolve into a sustainable, digitally-forward company that puts customer needs first. We have a considerable journey ahead.

We aim to be at the forefront of innovation within the tyre industry, serving our customers’ evolving needs, particularly in the rapidly changing realm of mobility. That’s a daily challenge I wake up to. Another challenge lies in our team of 19,000 people spread across the globe, from the U.S. to Australia. The question is, how do I unite this vast team, inspiring them to work harmoniously towards the vision we’ve established for 2026?

Q: How do you maintain a consistent global culture?

[Neeraj Kanwar]: The key to uniting our team begins at the top with the chairman and is deeply rooted in the Apollo ‘One Family’ culture. This culture serves to bind the entire organisation together. We encourage our staff to host family gatherings, allowing the extended family to learn more about our company. We’ve organised numerous trips to India to familiarise our employees with the country. Just last December, we welcomed 50-60 colleagues from Holland, showcasing both India and Apollo Tyres. This integration is a gradual process.

Additionally, our compensation structure, divided into fixed and variable pay, supports performance. We have a performance-based bonus system where clear Key Result Areas (KRAs) and Key Performance Indicators (KPIs) are set. These provide explicit targets that we strive to achieve each year, thereby promoting a performance-driven approach within the organisation.

[Vikas: and how does this differ from a ‘typical’ corporate?]

[Neeraj Kanwar]:  The most significant difference is that I’m deeply invested in this; my skin is in the game. My commitment isn’t confined to a three-year contract, after which I pack up and leave. I’m here for the long haul, here to lead as long as my shareholders wish me to. This is what fuels my drive.

It’s not just me; my C-Suite, a team of 10 or 15 individuals, has been with me on this journey, watching the company grow from $450 million to $3 billion over 20 years. These people, too, have their sweat in the game; they feel a sense of ownership. The chairman always tells us to regard this as our own company. When you perceive it as your own, you inherently desire to implement things differently, finding increased motivation, passion, and dedication to the business. This philosophy truly propels our employees at Apollo.

Q: What does legacy mean to you?

[Neeraj Kanwar]:  What I aspire to imprint in the business world is, yes, a culture of joy. A place where people genuinely relish coming to work. That’s a crucial objective for me. I aim to leave behind an institution that nurtures global business leaders who truly delight in their work.

Thought Economics

About the Author

Vikas Shah MBE DL is an entrepreneur, investor & philanthropist. He is CEO of Swiscot Group alongside being a venture-investor in a number of businesses internationally. He is a Non-Executive Board Member of the UK Government’s Department for Business, Energy & Industrial Strategy and a Non-Executive Director of the Solicitors Regulation Authority. Vikas was awarded an MBE for Services to Business and the Economy in Her Majesty the Queen’s 2018 New Year’s Honours List and in 2021 became a Deputy Lieutenant of the Greater Manchester Lieutenancy. He is an Honorary Professor of Business at The Alliance Business School, University of Manchester and Visiting Professors at the MIT Sloan Lisbon MBA.