Michelin Explores Indian OE Market

Michelin is keen to enter the OEM (original equipment manufacturer) segment of the Indian passenger car and truck markets, according to the Indian press. This was made clear in an article with The Hindu recently, in which Herve Dub, Chief Executive Officer, Michelin India Tyres Private Ltd. said, “We are in discussions with some OEMs. There will be some good news on this front in 12 months,” he added.

Michelin has strong links with OEMs globally. This would help it to forge relationships in the Indian OEM market, Mr Dub said. There was room for more players, although the competition in the Indian tyre industry was tough. In the bus segment, Michelin is the OEM supplier to Volvo’s Mark II vehicles. The company, he said, had initiated discussions with some truck manufacturers to become their OEM supplier. Currently, Michelin was importing tyres from its Chinese plant to service the truck and bus markets in India. For the replacement tyre market for cars, the tyres were sourced from its facilities in Thailand, he added.

Mr. Dub was in Chennai to inaugurate Michelin’s first Priority Partner Outlet (Lal Enterprises). Mumbai, Pune, Kochi and Coimbatore, too, have Michelin Priority Partner Outlets (MPP). “These (MPP outlets) are the first shops of their kind in India,” he said. They offered a new shopping experience, where the environment would be clean and professionals would be providing correct advice and guidance. These outlets would promote Michelin’s `boutique’ products, he added.

The Indian tyre field is dominated by the `bias’ (nylon cross-ply) market, comprising close to 99 per cent of the tyre industry. Michelin, on the other hand, was a dominant player in the radial segment, he said. He cited the road conditions, overloading of trucks, poor upkeep of trucks and the structure of truck ownership among the reasons for the dominance of the Indian market by bias tyres.

Mr. Dub said that Michelin’s decision on establishing a production base in India would also have to take into account the pace of `radialisation’ of the tyre industry. “We need a critical volume,” he said, pointing to Michelin’s aggressive promotion of radial tyres in India.

In this context, he said Michelin had only postponed and not cancelled its plan for setting up a production unit in India. Nothing had changed drastically since Michelin had made an announcement some time ago on the subject after buying out Apollo Tyres in the joint venture, he pointed out. Following the buy-out of Apollo Tyres, Michelin India Tyres Private Ltd. has become a fully owned outfit of the Michelin Group.