Michelin Looking to Increase Russian PCR, LCV Tyre Production

Michelin is planning to increase its activities in Russia. Bloomberg writes that Michelin Russia will double capacity at its Davydovo passenger car tyre plant to four million units per annum, and also next year open a facility for retreading commercial vehicle tyres. This retreading operation will apparently serve as a precursor to local truck tyre production.

Russia’s truck tyre market is the largest in Europe and Eric Faidy, general manager of Michelin Russia, has noted “there’s little sense in producing truck tyres elsewhere.” Part of the Russian market’s attraction is that fleet operators in Russia are increasingly choosing radial designs, making the potential for growth there significant.

According to the Association of European Businesses in the Russian Federation, sales of new passenger cars and light commercial vehicles fell 51 per cent year-on-year during the first ten months of 2009, and Faidy says this downturn has prompted demand for tyres to shrink by as much as 35 per cent. Yet signs of stabilisation in the automotive industry point towards a return to growth next year. “If the recovery is confirmed toward the end of 2010, we can immediately launch major projects to add capacity,” elaborated Michelin’s finance director for the region Bernard de Vaugerin. According to Bloomberg, the additional production will come on stream around 2012.