Michelin outlines China strategy at Italian investor day

ERJ staff report (DS)

Cuneo, Italy -- At an investor day held in Cuneo, Italy, Michelin outlined its strategy in China and also its progress at the Cuneo plant. The company said the Chinese tyre market is in transition, with the passenger car replacement market set to increase from around 52 million units in 2010 to 150 million by 2016 and 252 million by 2021.

This means the Chinese market is growing fast to Western levels of vehicle ownership. Yves Chapot in his presentation said that the number of passenger cars per 1000 population is currently (2011) around 55 units, but is set to increase sharply to 132 in the coming 5 years, and to 220 by 2021.

On the heavy truck side, China saw its annual heavy-duty truck sales rise above 1.3 million units for the first time in 2010. Overall, the Chinese market for truck tyres is the biggest in the world, with 41 million units, or around 35 percent of the total global market. However, this represents only 11 percent of the global market by value. Chapot forecast that truck tyre sales in China will increase to around 64 million in 2016, a CAGR of almost 9 percent, in a market which is already by far the biggest in the world.

Chapot also noted that the use of tubeless tyres is also on the increase, with the share of tubeless currently at 18 percent, growing to 38 percent in 2016.

Chapot said China expects to introduce norms and regulation on tyre rolling resistance. A set of threshholds will be brought in from 2013 with grading after 2015. In addition, OEMs in both truck and consumer segments are starting to demand improved fuel economy from their tyre suppliers.

Michelin also noted that Chionese consumers now use the internet as a prime place to share their experiences of products and services. Around 43 percent of Chinese consumers comment on websites, whereas only 23 percent of US consumers do the same.

Chapot said Michelin has a total of 5717 points of sake for its tyres, which is ahead of Bridgestone (4646 outlets); Hankook (2023); Goodyear (1610) and Continental (1380).

He said the Shenyang factory no 2 is on track with 320 000 m² of buildings to be complete in March 2012 and the first truck tyres being produced from July 2012 and the first passenger car tyres a year later, in July 2013.

In another presentation, Simone Miatton said the Cuneo plant is a major mixing centre for Michelin, producing a wide range of products. The unit makes butyl compounds for use in Cuneo's inner tube factory. These tubes are distriubuted to Europe (50 percent); Africa (33 percent and oter areas of the world. Over 65 percentof output is for truck tyres, with 20 percent aimed at the car segment and 2 percent going into aviation tyres.

Cuneo made 123,890 consumer tyres in 2011, projected to increase to 151,163 in 2016

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Presentations from Cuneo investor day