Thursday, November 19, 2009

US Truck Tire Sales Down As Michelin Expand Tyre Plants In Russia And India

Fight on for Percentage of Smaller Market
Shipping News Feature

US – RUSSIA – INDIA - Just a few weeks ago Goodyear announced their US truck tire facilities were only running at around 40% of capacity due to the slump in truck tire demand. Industry insiders say the duty penalties now imposed on Chinese light truck tire imports, as reported here last month, had caused a price rise on such items of up to 20%.

Michelin, having announced their intention to double production of its car tires in their Davydovo plant, South of Moscow, are to invest heavily in a retread facility to service local Russian haulage requirements. Russian tire sales have slumped along with the rest of the world but Europe’s second largest market now require a higher standard of tire than they have purchased hitherto.

The trade in Europe has always been confused, with drivers and fleet operators demanding different qualities from their road rubber. Some countries prefer longevity at the cost of handling and braking efficiencies but, in a modern world, where margins are tight and competition fierce, the ex Communist nations now demand quality equipment and this includes tires. With the equivalent demand for retreads this means Michelin have placed themselves well in the ceaseless battle with other giants, Goodyear, Continental and Bridgestone, all of whom have eyes on the traffic and have either invested, or have plans to invest in the country.

Michelin have also announced they plan to fight the cheap Chinese brands on another front with their plans this week to invest $870 million over the next three years with the signing of a MOU with government officials in Southern India. The intention is to construct a new truck tire manufacturing plant in the area. The company have invested heavily in the subcontinent for the past decade and the new facility will be based near Chennai and employ around one and a half thousand people. Production should be on stream by 2012.