Tyre industry pioneers, Michelin has a long history. Having begun in 1889, Michelin is now the second-largest tyre manufacturer in the world after Bridgestone and larger than both Goodyear and Contineantal.
Two agreements have been signed by Nokian and Michelin concerning the off-take manufacture of Nokian brand agricultural, industrial and truck tyres at Michelin’s Polish factory. The agreements will last for three years and will be renewed annually thereafter. Sales of agricultural and industrial tyres will start this year and truck tyres early in 2001.
Michelin is introducing its “Riken” brand into the truck tyre market. The newly-developed tyres will be produced by subsidiary company Taurus in Hungary.
The Bridgestone Group seems to be surprised by the Joint-Venture of Goodyear and Michelin regarding the PAX and Run Flat Technologies. The Group is ‘studying and analysing the project’. Somebody, who does not want to be named, said there was also surprise in Hanover when a French colleague or competitor called a few days before the announcement.
Third quarter results from Michelin are stronger than expected with revenues growing by 16.4% to 3,916 Euro or 14.6% if the first nine months 2000 are compared with the same period last year. Taking higher raw material costs and other economic factors into account, an EBIT of about 8% seems to be realistic for this year.
Michelin AVS (49%) and WOCO AVS (51%) have founded a joint-venture group for cooperation in the field of car vibrations. The combined turnover of the new company is around 250m Euro.
The German newspaper Süddeutsche Zeitung has announced that Michelin intends to shed 1,800 jobs out of a total of 28,700 at its four plants in France according to the company’s restructuring plan. Most of them will be achieved by early retirements but approximately 100 employees will have to leave the company involuntarily.
In a telephone conference on 28th July, following an earlier profits warning and subsequent fall in Michelin shares of around 10%, the management tried to explain the reasons for the profits warning. June was a bad month but there is still hope that the company will achieve an EBIT comparable to that of the first half of 1999. Exact figures will not be available until September. The problems are in the USA, where it was not possible to obtain better prices for truck tyres. On the other hand, the increase in raw materials prices (rubber, oil, carbon black), forecast to be about 3%, will now, it seems, be more like 4 or 5%.
Michelin is to introduce two new off-road tyres. Prototypes were shown to the public for the first time at the Essen Motor-Show. The “Diamaris” is primarily designed for street use and will be available in sizes up to 20 inches. “Synchrone” has been developed mainly for off-road use.
With the new Michelin Pilot Primacy, introduced to the trade press at the beginning of March and available through the trade this spring in a total of 33 sizes, the company intends to strengthen further its dominant role as original equipment supplier of high-performance tyres. Dynamic market development can be observed in all European states in this exacting segment, sometimes up to double-digit annual growth rates. Michelin, too, puts its faith in significant growth in this segment by introducing the second generation of the Pilot family, up-dated by the Primacy, a tyre conceived for original equipment but later also to be supplied to the refit market. The new tyre was specially designed for the requirements of high-mileage drivers, who expect not only safety reserves but also a high level of comfort during frequently long journeys in their fast top and upper medium-class cars. Among the car manufacturers’ specifications highest priority has been given to weight reduction, safety, ride comfort and easy handling. In the April issue of NEUE REIFENZEITUNG you can learn more about how Michelin wants to meet these requirements.
Michelin has long been established as a leader in the European truck tyre retreading market with its famous Remix process, but now the French company has turned its attentions to the US retreading market, where it is causing quite a stir. The size of the market is enormous; according to the Tire Retread Information Bureau, in 1999 there were 18.1 million large truck retreads sold, compared with 15.7 million new truck tyres, and Michelin has announced its intention to double its market share, from 10.2% to 24.6% by the year 2002. The company has done this not through using the Remix process, but by cold cure retreading, forming Michelin Retread Technologies Inc. (MRTI) and signing up licensees. By March, Michelin had 37 such franchisees signed up and expects this figure to increase to fifty by the year end. As a comparison, Goodyear has some 167 truck tyre retreading partners in North America. Michelin’s cold cure retreading process is called Recamic and it uses rubber produced by Michelin. Like Remix, Recamic is promoted as a premium product. For those retreading partners who may be looking for something a little cheaper, Michelin produces Newlife, a less expensive alternative. The article in May’s TYRES & ACCESSORIES examines Michelin’s commitment to retreading, both in Europe and outside, and looks at the retread market itself.
Robert J. Keegan (53), one time top manager with Kodak, assumed the position as Goodyears‘s president and chief operating officer in Akron on 1st of October, making him the deputy and named successor of chairman Sam Gibara (61). According to group publications, Keegan will be responsible for day to day business, whereas Gibara will be more concerned with strategy.
Speculations have come to an end: Michelin will participate in Formula 1 racing from the 2001 season. Initially, the company will supply tyres to the BMW/Williams team and, at some time before 2003, Michelin will team up with Team Toyota, who confirmed their entry into the sport earlier this week. Michelin has competed in F1 before, from 1977 to 1984, winning three Drivers’ and two Constructors’ titles. The reason for entering the sport now is to increase world-wide recognition for the Michelin brand.
Consumers can boost their air miles accounts with Lufthansa by 2,000 miles if they buy four Michelin Pilot tyres and are willing to fill out a customer survey questionnaire. More information is available from Michelin in Karlsruhe or from Michelin trade partners, although they were not able to answer questions from this magazine.
Czech tyre manufacturer Mitas is to purchase the motorcycle tyre manufacturing business from Trelleborg. The purchase (the price of which was not revealed) includes the license of the trade mark ‘Trelleborg’ and increases the Mitas motorcycle tyre portfolio by 15 designs in 57 sizes.
The Siam cement Group is to reduce its shareholding in the Michelin Siam Group from 50 per cent to 40 in order to concentrate on its core business. The shares will be purchased by Michelin, the other partner in the joint venture, giving it a 60 per cent stake. Michelin Siam has three factories in Thailand, plus a tyre mould making plant and a steel cord factory. The company makes Michelin brand tyres for vehicles from motorcycles to aircraft.
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