Michelin Reaps Benefits of Bridgestone and Goodyear Mistakes in the USA

The current winner in the American car tyre replacement business is Michelin. On the one hand, the French profit from the catastrophic supply situation of their two main competitors, Goodyear and Bridgestone, which achieve so-called “fill rates” of 60 p.c.

or even less, but they also reap the benefits of the successful introduction and implementation of their multi-brand strategy, which has made a “demand management” possible. In contrast to their big competitors the French have a very clear brand policy with no further differentiation within a brand, and they no longer produce private brands, all of which considerably shortens the reaction time to changed market conditions. Goodyear and Bridgestone cannot achieve Michelin prices.

The groups will not improve their unsatisfactory “fill rates” as long as they also manufacture large quantities of private brands. The Japanese cannot develop a multi-brand strategy since they lack a strong leading brand – Bridgestone not being blessed with a high degree of brand awareness everywhere in the USA. For a long time the Americans differentiated very strongly within the Goodyear brand; now they have to position Dunlop tyres as well.

That will also mean the need for significant investment in the brands. Furthermore, Goodyear managers in particular are currently confronted by a hostile gut reaction from the trade, whether capable of rational explanation is neither here nor there..