Chinese JV Company “Will Make Warrior And Michelin” Tyres

Michelin and the Chinese Shanghai Tire and Rubber Co. (STRC) have signed agreements to enter into a co-operation for radial passenger car tyres, radial truck and bus tyres and steel cord. Michelin and STRC will form a new foreign-investment company based in Shanghai for the manufacturing and sale of radial passenger car tyres, steel cord and rubber mixing.

In the new company, Shanghai Michelin Warrior Tire Co. Ltd. (SMWT), Michelin will hold a seventy-percent share and STRC thirty percent.

The total investment will be 200 million US dollars. Eric Jugier will be Head of SMWT, Fan Xian, the current Chairman of STRC, will be Vice-Chairman. SMWT will acquire the radial passenger car tyre production facilities and the steel cord factory currently owned by STRC and manufacture radial passenger and light truck tyres for the Chinese market as well as for export.

It is anticipated that the company will continue to produce Warrior brand tyres and will produce, as soon as technically possible, Michelin brand tyres. A key factor for the success of the company will be the development of a multi-brand strategy. The new company will make the required investments to further increase the manufacturing capacity of the plants.

2710 people coming from STRC will be joining the new company. SMWT has a production capacity of 5 million passenger car and light truck tyres per year and of 5000 tonnes of steel cords. In addition, Michelin has agreed to provide to STRC technical assistance for its Double Coin brand truck and bus radial tyre production facilities.

Michelin will also create a Research and Development Center in Shanghai. The scope of activity of the R&D Center will be to participate in solving the technical needs of vehicle manufacturers established in China, as well as those of the Chinese market. The R&D Center will be incorporated as a wholly owned foreign enterprise, with 100% of the share capital owned by Michelin.