Demand from EV sector, eco-friendly drive persuade firm to expand in China

Driven by soaring demand from China's electric vehicle sector and green transformation, Michelin Group, the French tire and mobility company, will continue to expand its manufacturing facilities and produce more tires by recycling materials in the country, said its top executive.

Upbeat about the Chinese market, the Clermont-Ferrand, France-headquartered multinational company put an expansion project into operation at its Shanghai plant early this month. This move will lift the annual tire production capacity of the plant from 8.5 million units to 9.5 million units.

Florent Menegaux, CEO of Michelin Group, said the group remains committed to introducing its most recent advances in research and development in the Chinese market. Robust demand for innovative products and services among the company's Chinese customers, and consumers at large, strengthens its dedication to innovation, he said.

"China's abundant talent resources are conducive to long-term development of our business. By attracting talent with an international perspective, we can accelerate business development with, around and beyond tires."

Amid the challenges of global economic fluctuations, the significant expansion of China's new energy vehicles and the sustainable sector has offered substantial business opportunities for global tire manufacturers. They are committed to actively participating in China's high-quality development, intensifying R&D investments in a more sustainable and green transformation, he said.

To seize more market share, Michelin introduced its latest tire product, composed of 63 percent sustainable materials, marking its Asia debut at the sixth China International Import Expo in Shanghai, which was held from Nov 5 to 10.

Michelin has also invested 200 million yuan ($28 million) to kick-start a project for the production of 1.3 million passenger car tires at its plant in Shenyang, capital of Northeast China's Liaoning province. Once fully completed, the annual production capacity of passenger vehicle tires at the plant will increase to 17.3 million units.

As of the end of September, China's motor vehicle ownership reached 430 million units, with 18.21 million registered new energy vehicles, including 14.01 million EVs, data from the Ministry of Public Security showed.

More than 5.19 million NEVs had been registered in China during the first three quarters of this year, up 40 percent from the same period last year and accounting for 28.6 percent of all new automobile registrations, government data showed.

"Apart from supplying more tire products in China, we are progressively venturing into connected services and solutions, high-end materials, hydrogen mobility and mobility experience businesses," said Menegaux, stressing that embracing digitalization is crucial for navigating the dynamic market landscape and capitalizing on additional opportunities.

With many countries seeking new ways to boost their economies, Michelin is accustomed to experiencing economic cycles, and the company is not overly concerned about downturns, the French executive said.

"We will continue to adapt. 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."

The latest official data prove his point. Foreign direct investment in China's manufacturing industry grew by 1.9 percent year-on-year to 283.44 billion yuan in the first 10 months, while that in high-tech manufacturing soared 9.5 percent on a yearly basis, data from the Ministry of Commerce showed.

Moreover, China's long-term plan is focused on quality-oriented growth. It implies sustainability and consideration of people's interests. The goal is to ensure responsible resource utilization and the production of durable goods, he said.

Supported by 132,200 employees, nine R&D centers and 67 tire production facilities across the world, Michelin's sales revenue grew by 2 percent year-on-year to 21.2 billion euros ($23.2 billion) in the first three quarters, according to the group's financial report.

China's sustained industrial upgrade and dedication to environmental sustainability will bolster the country's competitive edge as many multinational corporations have been keen to build more innovation centers and service-related businesses across the country, said Lin Meng, director of the Modern Supply Chain Research Institute at the Beijing-based Chinese Academy of International Trade and Economic Cooperation.

She said that facilitating the deep integration of the digital economy and the traditional industrial economy is essential for achieving new industrialization in China. This integration will bring about "new infrastructure", innovative application models and a revitalized industrial ecosystem.

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