Michelin’s Radial Plans Rely On Demand

Michelin has put its planned collaboration with Apollo Tyres on hold while the businesses wait for the national radialisation rate to gather speed. The company maintained that their working relationship was on track, but that demand has to increase before manufacturing work gets underway.

Herve Dub, CEO, Michelin India, told local news sources that the penetration of radial tyres in the Indian market is less than 1 per cent currently, which makes it unviable to set up manufacturing facilities here, despite the fact that Michelin Apollo Tyres has bought land at the Ranjangaon industrial estate near Pune. “We have realigned our partnership with Apollo in this regard so that both of us can tap the immediate growth opportunities in the market. Michelin’s strategy will be to grow our truck and bus tyres business significantly along with focussing on the passenger car side,” Dub said.

He pointed out that the pace of radialisation and adoption of advanced technology by the domestic truck and bus industry was not in keeping with the company’s initial estimates.

While penetration of radial tyres in Europe, the US and Thailand was a 100, 85 and 30 per cent respectively, it is 1 per cent in India, he pointed out. “This leaves us with a huge window of opportunity to tap,” he said.

Michelin will grow its business by tapping the 700,000-a-month replacement market and the 7,000-unit first time sales market for radial tyres.

“With the quality and quantity of trucks in the market growing rapidly, the market is picking up and we will further grow it by educating the trucking community about the benefits of adopting radial tyres which gives better fuel economy and longer life,” he said.

The company on also launched Michelin Priority Partner, a multi-brand tyre retailing outlet scheme.