French tire and mobility company Michelin Group is set to bolster its manufacturing presence in China, spurred by escalating demand in the country's electric vehicle (EV) sector. In a recent announcement, CEO Florent Menegaux revealed the initiation of an expansion project at the Shanghai plant, projecting an increase in annual tire production capacity from 8.5 million units to 9.5 million units.
Menegaux expressed confidence in the Chinese market, stating, “China's abundant talent resources are conducive to the long-term development of our business. By attracting talent with an international perspective, we can accelerate business development with, around and beyond tires.” He emphasized the company's dedication to introducing cutting-edge research and development to cater to the robust demand for innovative products and services.
The expansion aligns with Michelin's strategy to actively engage in China's high-quality development, particularly within the new energy vehicles and sustainable sectors. Michelin aims to capture market share by introducing its latest tire product, composed of 63 percent sustainable materials, at the China International Import Expo in Shanghai.
Menegaux also disclosed a 200 million yuan ($28 million) investment in a project at the Shenyang plant, focused on producing 1.3 million passenger car tires and increasing the annual production capacity to 17.3 million units. This move responds to the considerable growth in China's motor vehicle ownership, reaching 430 million units by September, with a substantial number being new energy vehicles.
In addition to supplying more tire products, Michelin is strategically venturing into connected services, high-end materials, hydrogen mobility, and mobility experience businesses. Menegaux stressed the significance of embracing digitalization for navigating the dynamic market landscape and capitalizing on additional opportunities.
Despite economic cycles, Menegaux remains optimistic about the structural growth of the automotive market in China, asserting, “I believe that structurally, the automotive market will continue to grow because the vehicle penetration rate in China is lower than that in many countries. Therefore, I anticipate an increase in the Chinese vehicle fleet over the coming years.”
With 132,200 employees, nine R&D centers, and 67 tire production facilities globally, Michelin reported a 2 percent year-on-year growth in sales revenue to 21.2 billion euros ($23.2 billion) in the first three quarters, demonstrating adaptability to economic changes and a focus on long-term growth.