Tire giants adapt to the development of the Chinese market

In recent years, the world's largest tire manufacturers, Michelin and Bridgestone, have been changing their strategy in the Chinese market to adapt to the rapid growth in demand for new energy vehicles (NEVs), according to Yicai.

"The changes in China's automotive market are tremendous," said Ye Fei, president of Michelin's China and Mongolia division. "We did not expect Chinese brands to develop so rapidly and almost surpass foreign players this year."

Currently, China is the world's largest automotive market, and the share of NEVs exceeded 50% for the first time in August 2024. According to the China Association of Automobile Manufacturers, sales of NEVs in the first 10 months of the year increased by nearly 40% to 9.75 million units.

According to Ye Fei, in the current market situation, Michelin is cooperating with both well-known Western automakers and Chinese startups developing electric vehicles, which have higher requirements for tires. "We were not satisfied that only one of our products was suitable for NEVs, so we made great efforts to adapt all our tires to the characteristics of new-type vehicles," he added. "China is one of the few markets where Michelin has achieved rapid growth over the past 20 years and plans to continue this development over the next 10 years. For this reason, we have very ambitious goals in the local market."

According to him, for long-term development in China, the company will need to expand its research and development capabilities and improve its ability to meet the needs of Chinese automakers. At the end of last year, it was announced that by 2026, Michelin will increase the annual production capacity of its Shanghai plant from 8.5 to 9.5 million tires. In addition, at the beginning of this year, the company reported that it will gradually re-equip its Shenyang plant and switch it from producing truck and bus tires to producing passenger car tires. Eventually, the enterprise will be able to produce more than 17 million passenger car tires per year.

Bridgestone's China chief, Augustin Pedrotti, says the company is continuously increasing investment in its Chinese plants to meet the growing demand for NEV tires, which is expected to continue to increase.

In late 2021, Bridgestone closed a truck and bus tire plant in Huizhou, and in early 2024, it also closed a plant in Shenyang that produced tires in the same category. It was noted that the decision was made because the recovery of the truck tire market was slower than expected. In June 2024, the company announced that it will invest 562 million yuan (77.6 million dollars) over the next three years to increase the production of premium passenger car tires at its Chinese plants.

As Ye notes, Michelin also plans to increase its production capacity in China over the next 10 years, including in Shanghai and Shenyang. In turn, Pedrotti adds that the company will invest in both plants and the development of retail sales channels to take advantage of the rapid development of the local market.

Photo: Tanhei.