Group Michelin has its eye on grabbing a larger slice of tire sales from emerging markets in the world, but it's not overlooking opportunities in western Europe, North America and Japan.
By 2009, the French tire maker estimates the market for replacement and original equipment passenger and light truck tires worldwide will expand by 11.4 percent to 1.17 billion tires, compared with 1.05 billion in 2004, said Jean-Michel Coulon, Michelin corporate vice president of purchasing.
Of these, 70 million to 80 million tires will come from emerging markets, with China accounting for 40 million.
Mr. Coulon shared the company's estimates on worldwide tire growth as part of a panel program at the 47th annual General Meeting of the International Institute of Synthetic Rubber Producers, held earlier this year in Barcelona.
He also discussed the company's natural and synthetic rubber operations, efforts to reduce tire rolling resistance and its commitment to environmental concerns.
Besides China, Mr. Coulon said Michelin sees growth potential for tires in regions like eastern Europe, Russia and South America. ``We want to be there in these countries to take (advantage of) the market opportunity,'' he said.
The tire maker also anticipates growth of about 60 million tires coming from western Europe, North America and Japan over the period.
Much of this increase will come from an expected rise in the world's vehicle population. Michelin estimates the number of cars globally will double by 2030, increasing to 1.6 billion vehicles.
``We feel we need to take share in these new (emerging) markets, but we need to strengthen our market share and our manufacturing performance in the western part of the world,'' Mr. Coulon said.
The Michelin executive also tried to dispel the myth that ``tire contribution to fuel consumption is negligible.''
To illustrate this point, he cited a car that travels 60 miles on two gallons of fuel. The tires on this vehicle can affect fuel consumption by up to half a gallon, or or up to 25 percent. On large trucks, tires' impact on fuel consumption can be up to 40 percent, he said.
Most of Michelin's major innovations over the past few years have been designed to reduce rolling resistance, he said.
Mr. Coulon suggested that if tire makers could decrease rolling resistance in tires by 30 percent, it would translate into a 5-percent reduction in fuel consumption. In Europe, this would save 3.79 billion gallons of gasoline/diesel fuel, or 88 million barrels of crude oil, annually.
To help reduce rolling resistance in its tires, Mr. Coulon said Michelin has developed its own solution SBR-the polymer used most often to lower hysterisis, and thereby rolling resistance. During the past 10 years, tire rolling resistance has declined 30 percent, and he thinks the company can achieve another 20-percent decrease by 2010.
Michelin's consumption of natural and synthetic rubber is roughly split 50:50, and the company is committed to both, Mr. Coulon said. The firm has six rubber plantations around the world, which cover only a small portion of the company's needs.
While Michelin requires NR to make truck tires, Mr. Coulon gave two other reasons why it's good to use that material in tire manufacturing.
One is social, he said. ``On this planet, we have 40 million people living from natural rubber. We cannot forget about that.''
The second reason is environmental-rubber trees use carbon dioxide and produce oxygen.
``We think today and in the (coming) years this issue is going to become more important for industry,'' he said. ``So we keep a very close eye on the environmental balance on what we consume in terms of rubber sales, and we think natural rubber has many years to live.''
Michelin operates SR plants in Louisville, Ky., and Bassens, France. Both produce polybutadiene rubber as well as solution SBR, with the Louisville plant producing 180,000 metric tons per year of rubber and the Bassens plant adding 150,000 tons. Together they provide about 45 percent of the firm's needs.
SBR is slowly taking a bigger portion of the company's rubber production, and as a result Michelin is purchasing more polybutadiene from outside sources.
Asked if Michelin is considering teaming up with other polymer producers regarding its SR needs, Mr. Coulon said the company is reviewing whether it should be more integrated in terms of production of raw materials or whether it should buy more.
``We are open to cooperation outside because it costs a lot of money to build a plant,'' he said.
What was the most interesting story from 2018?
|Michelin, Sumitomo form tire distribution joint venture, NTW.||
12% (32 votes)
|Bridgestone, Goodyear form tire distribution joint venture, TireHub.||
37% (102 votes)
|ATD cuts staff, declares bankruptcy as result of wholesale market disruption.||
28% (77 votes)
|Trade war escalates and NAFTA is replaced.||
8% (23 votes)
|Disruption in auto industry as Ford eliminates most sedans, GM to shutter 3 plants||
8% (22 votes)
|Michelin continues to grow, acquires Camso, Fenner.||
8% (21 votes)
|Total votes: 277|