Michelin wants to improve global sales of its budget tires

Article by Christian A., on November 30, 2014

Michelin plans to hike the percentage accounted for by budget tires in its global sales mix from the current 15-20 percent to 25-30 percent in the next five to 10 years as the tiremaker bids to counter a surge in Chinese imports in Europe and the United States, Michelin chief executive Jean-Dominique Senard told Automotive News Europe.

The company’s entry-level tires include the Tigar, Kormoran and Riken brands, producing them at a Serbia site to be exported in Europe, Russia and the Middle East. However, almost 50 percent of all tires imported into Europe are from China, according to data from LMC Auto.

Senard remarked that growth in North America is “quite tremendous,” noting that exports to the region have tendencies to affect the price structure of the tire business. Rob Simmons, head of rubber and tire research at analysts LMC Auto, remarked the primary contributor for that growth is the surging quality of Chinese brands, which are helped by the new European labeling system that provides scores for wet braking performance, rolling resistance and noise.

Simmons divulged to Automotive News Europe that Chinese tires are scoring higher, especially on rolling resistance that helps fuel economy. He noted that tires in Europe are good on wet grip, but fare less on rolling resistance. Michelin recently commenced output of budget tires in China in a joint venture with Double Coin under the Warrior brand but has plans to them outside Asia.

Florent Menegaux, Michelin’s director of car and van tires, told Automotive News Europe that the carmaker’s goal with move is not to turn China into an export hub. Senard remarked that Michelin has no interest in becoming a leader in very low-cost tires, noting all of the company’s tires “have the basic characteristic of being safe." [source: automotive news - sub. required]

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