BAIC, Apollo Tyres Near Deal on China Venture

Beijing Automotive Industry Group Co. and India's Apollo Tyres Ltd. are close to launching a tiremaking venture in China.

The venture will start with capacity to make about 1 million passenger vehicle tires per year at a factory in Huanghua, according to BAIC Chairman Xu Heyi.

The deal will enable Apollo to establish a presence in China after failing last year to buy U.S.-based Cooper Tire & Rubber Co. and a Cooper tiremaking venture in Shandong. When workers at the factory protested the sale, Apollo withdrew. The plant was acquired by Cooper partner Chengshan Group Co. Ltd. for $285 million last autumn.

Assuming the venture is approved, Apollo to join Asian competitors Bridgestone Corp. (Japan) and Hankook Tire Co. (South Korea) in China. Bloomberg News notes China's domestic tire output has quadrupled to 941 million units in the past 10 years.