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February 04, 2002 01:00 AM

Michelin to use C3M for market niches

Liz White
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    Group Michelin will use its proprietary C3M tire manufacturing technology to attack lucrative tire market niches, such as ultra-high-performance, winter or sport-utility vehicle, according to top company officials.

    C3M is ``clearly perceived as a strategic tool for the group,'' said Chairman Edouard Michelin. ``We are very clearly the first to have an industrial machine working in this type of manufacture,'' the Michelin chief added, comparing the C3M process with other tire makers' recent advances in tire technology.

    ``For us it (C3M) is revolutionary; it is a tool to enable us to conquer the market,'' said Herve Coyco, head of passenger car and light truck (P/LT) tires. He stressed that in a stable overall market for passenger and light truck tires, demand in the SUV and UHP sectors is ``exploding.''

    Michelin's C3M technology-``an innovative compact modular system...that can produce extremely diversified products''-is now ready for industrialization, declared Dominique Bronner, vice president-and Mr. Coyco's deputy-at Michelin's P/LT tire division.

    The French tire maker ``did originally envisage substituting tire machines in existing factories'' with the C3M technology, Mr. Michelin acknowledged. It is clear now that ``this is not the best use we could make of the machines,'' he told journalists at a briefing at Michelin's test center for earthmover tires in Almeria.

    Existing plants can focus on mass production, while Michelin broadens its top-range sales using C3M equipment, Mr. Michelin said.

    Mr. Coyco pointed out that the mass market in P/LT tires is stable or declining. ``Should we substitute machines to supply this market, when there is (another) market with 30 to 40 percent growth?'' he asked.

    Michelin's recent sales have shown unusually high growth in the UHP sector, Mr. Coyco said, citing a rise of more than 40 percent in European sales of replacement V/Z tires during 2000-in a market with overall growth estimated at 13.3 percent. Globally, Michelin's V/Z sales increased by 16 percent over the same period.

    Its North American replacement sales of 4x4 and light truck tires rose 27.7 percent for the year, in a market with estimated total growth of 15.4 percent. So Michelin is experiencing higher demand than the industry average for its tires.

    Because C3M is flexible, it will be ``an extraordinary industrial tool'' to allow Michelin to tackle swings in market demand, Mr. Coyco said.

    Small flexible C3M units will also enable Michelin to adapt to another current trend in the automotive sector-``mass customization.'' Customers want differentiated products-ones that stand out from the crowd-but want to pay the same price for them as they pay for mass-produced products, Coyco said.

    Mr. Coyco used BMW's recent X5 SUV model as an example of how easily Michelin can use C3M to raise production to meet unexpected demand.

    BMW planned to make 1 million of this model, but demand was three times as high, so the German car maker needed three times more tires. Michelin used C3M technology to supply the expanded demand.

    The small, easily transportable C3M units are fed with reels of compounded rubber in the form of thin, narrow strips and single steel and fiber cords. The large-scale production and storage of semi-finished parts such as calendered sheet and crown plies, which is typical of conventional tire building, is eliminated.

    C3M units operate on electricity and need no steam or compressed air supply. One unit requires only about 325 square feet of space, with the actual machine taking up less than half of this.

    Michelin has been highly secretive during its 15-year-old development about how C3M works. So it was no great surprise that, when showing the process to journalists at Almeria, they hid the machine from view. When moved to a new site, Michelin claims, a C3M unit can be up and running within 24 hours, which it demonstrated in Almeria-behind screens.

    This rapid setup, coupled with the fact that a single unit can churn out tires regardless of other facilities, is the beauty of the system, Michelin said.

    Such logistic flexibility is a breakthrough in a tire industry largely tied to huge cumbersome plants designed for mass production. In terms of making many types of tire, an individual C3M unit is probably not so flexible, since the mold size dictates the tire size.

    The process has been used to make aircraft tires-although not Concorde tires because there is a size issue with these, Mr. Michelin said. It has also been used for motorcycle tires, and Michelin has done some tests with heavy truck tires, he said.

    Michelin can use C3M to attack new geographic markets, gradually ramping up production, as it has done at a new plant in Resende, Brazil.

    It allows Michelin to move units across the globe in response to a sudden surge in a specific area.

    And it allows the tire maker to change tire types rapidly to cater for new market developments or new types of tire. C3M produces ``tailor-made tires,'' it gives the option of a different type of product mix, Mr. Bronner stressed.

    It can make small numbers of a series, as in blue tires Michelin supplied at Volkswagen A.G.'s request for a blue VW Beetle model.

    Last, but not least, Michelin claims C3M offers the potential for tires with significantly better properties than conventionally made ones.

    This arises because different rubber compounds with different properties can be applied in sections in different parts of the tire. One tread section can be designed for wet grip, another for dry grip, and rolling resistance can also be optimized-without compromising other properties, Michelin said.

    Michelin used this technology for its newest Pilot Sport A/S, launched in North America last summer.

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