Michelin: Domestic Sales now 30% of Eastern Europe Turnover

Although the commonly held perception of Eastern Europe is principally that of a low overhead production base from which tyres are exported to western markets, statistics released by Michelin Romania show that 30 per cent of this branch of the Michelin group’s turnover is now generated from sales in the Balkan region. And sales are growing; Michelin Romania estimates that the division will have an annual turnover amounting to about 325 million euro, 25 per cent higher than the 260 million euro turnover attained last year.

“Our sales in the region (i.e. Romania and the Balkans) account for 30 per cent of our turnover, with exports making up the remaining 70 per cent,” stated Jean-Marc Gebhart, CEO of Michelin Romania. In terms of market share, the Michelin group estimates it holds around 20 per cent of the car, van and truck tyre market in Romania and the Balkans.

The company’s estimated growth is based on the Eastern European market’s dynamism, which in turn has been triggered by the rapid and steady expansion of vehicle fleets, as well as by massive investments made by the region’s car and truck makers. At the end of 2006 the volume of investments operated by Michelin since its arrival into the Romanian market exceeded 180 million euros, with annual budgets for future investments amounting to around 30 million euros. These funds will be used for the training of personnel and the modernisation and development of production facilities.

Annual production in Michelin’s two Romanian facilities, in Zalau and Floresti, reached 3.8 million units in 2006, approximately 25 per cent more than the previous year’s overall production. Michelin Romania estimates that the Floresti plant, which concentrates on the production of passenger car tyres, has a maximum annual production potential of 5 million units. The facility in Zalau is responsible for the production of truck, OTR and agricultural tyres. Michelin acquired the two plants from the Tofan group in 2001 as part of a deal that also included the acquisition of other facilities. Michelin also owns a plant that manufactures metallic cord for tyre production in Romania.