Apollo Tyres to Shut Down Enschede Factory by Summer 2026

Apollo Tyres, the renowned Indian tire manufacturer, has announced plans to cease all tire production and related operations at its Enschede plant in the Netherlands by summer 2026. This strategic decision reflects the company’s response to mounting macroeconomic challenges and shifting market demands.

Multiple Factors Behind the Closure

According to Apollo, the closure stems from a combination of macroeconomic instability, a sharp increase in energy and labor costs, and a decline in demand for its Spacemaster and Agri branded tires. The Enschede facility, which primarily produces passenger car and agricultural vehicle tires, has become increasingly uncompetitive in today’s cost-sensitive environment.

President Benoit Rivallant commented,

“Over the past few years, we have implemented several cost-saving initiatives. However, most of these gains have been entirely eroded by rising inflation.”

The company cited intense pricing pressure from lower-cost competitors as a key reason for the factory’s declining viability. Apollo expects the high-cost environment to persist, rendering continued production at this site economically unsustainable.

Financial Impact

As of March 31, 2024, the Enschede plant reported revenues of 14.636 billion Indian rupees (approximately 1.249 billion RMB), accounting for around 5.8% of the parent company’s total consolidated revenue. While the plant plays a relatively modest role in Apollo’s global revenue, its closure marks a significant shift in the company’s European manufacturing footprint.

Formal Notification Issued

On April 25, 2025, Apollo’s Board of Directors formally notified the plant’s Works Council and Labor Committee of the decision. In accordance with Dutch labor laws, the company will now begin consultations with employee representatives to determine next steps, including staff transition plans and site decommissioning.

The company emphasized that a detailed phase-out schedule will be developed and communicated in the coming months.

Industry Implications

This move highlights the broader challenges facing the global tire industry in the post-pandemic era. In Europe especially, manufacturers are grappling with escalating operational costs, labor shortages, and intensified price competition. Apollo’s decision may signal a wider trend of factory closures and strategic consolidation across the sector.