PARIS (April 19, 2011) — Group Michelin and Chinese tire maker Double Coin Holding Ltd. have agreed to create a joint venture to produce and market Warrior-brand passenger car and light truck tires for the Chinese market.
The venture, which also involves Double Coin's parent Shanghai Huayi (Group) Co. Ltd., will be 60-percent owned by the Chinese partners and will operate a plant being built by Double Coin in Wuwei County, Anhui Province, Michelin said.
The parties signed a memorandum of understanding covering the venture April 18 in Paris. It reestablishes a business relationship between Michelin and Double Coin about 14 months after Michelin bought out Double Coin's minority share of the Shanghai Michelin Warrior Tire Co. Ltd. venture they'd jointly owned since 2001.
The companies did not say what the joint venture will be called nor what Michelin's financial contribution will be. Michelin said the move is “fully in line with (its) strategy to grow in fast-developing markets” and noted the deal is subject to approval by Chinese authorities.
The site of the new factory in Wuwei is about 250 miles west of Shanghai. Double Coin and Huayi green-lighted plans to build the $475 million tire plant four months ago. They listed the expected capacity at 15 million tires a year.
The disclosure came after Double Coin divested Shanghai-based Michelin Warrior last year to Michelin.
The parties did not say how the venture will affect the Warrior brand. Double Coin, the owner of the Warrior trademark, had granted Michelin last year the exclusive right to use the mark for its passenger car and light truck tire businesses for two years.
Separately, Michelin disclosed its own plans last November to build a $1.46 billion tire plant in Shenyang, to replace an existing 14-year-old factory in the same city. The new plant eventually will be capable of making 10 million passenger and light truck tires, 1.8 million truck and bus tires and 300,000 retreads for trucks and buses.
Present in China since 1988, Michelin employs more than 6,000 there at four industrial sites and in sales and distribution.
It distributes through a retail network of more than 4,000 sales outlets, including 611 franchised TyrePlus locations.