Michelin invests $400 mln to expand business in China

China's vehicle sales grow more than 20% annually over recent years. China’s fast growing auto market attracts not only auto giants like GM and Toyota, but also world's largest tire maker, Michellin, Michelin has invested more than$400 million up to now.

Michelin has accumulatively invested approximately $250 million in two facilities in Shanghai and $150 million in a factory in Shenyang, the capital city of Northeatern province of Liaoning. Besides investments in R&D and marketing, etc., Michelin's total investment in China has exceeded US$ 400 million.

During the first half-year, the volume of China tire market grew to 247,690,000 units, an increase of 23 percent from the previous year. Michelin’s sales figures were still unavailable, but company official said it would be a huge increase. .

"Michelin is commited to making innovations," said Antoine Guerin, vice president of  Michelin China, referring to Michelin's two new products this year, Energy XM1+ and Latitude series tires. The former is used for the compact sedans and the latter for the SUVs.

"We fully consider the needs of Chinese customers and develop the products they need," Antoine Guerin added.

During the first six months, Michelin received larger orders from customers of Audi, Honda, Toyota and Volvo, and also won orders from new customers like Chrysler and Mercedes-Benz.

Michelin and Goodyear are pioneers in the Chinese market. As the demand for passenger car and light vehicle tires grows, the competitions become intensified.

The French tire and wheel maker Michelin entered China since late 1980s while Goodyear had manufacturing operations in the country since mid-1990s. Continental, another tire-maker, opened a local office in early 2006,. and is ready to start local production shortly.

As a later-comer, Continental is planning to open around 100 franchised outlets in China by the end of the year in an attempt to achieve its object of selling 500,000 units by the end of 2008. Michelin's 400th franchising shop opened this April and the company plans to add 100 franchising shops world wide in coming years.