Business / Auto China

Wheels in motion

By Li Fangfang (China Daily) Updated: 2014-09-22 07:06

Michelin, one of the first foreign companies to enter the Chinese market, is still going strong with its focus on better mobility

Philippe Verneuil is reading the book France and China that outlines the diplomatic history between the two countries, and has already been deeply impressed by the first chapter on Charles de Gaulle's speech delivered in 1964, when the two countries decided to establish diplomatic relations.

"His vision was well seen. Although it has experienced ups and downs, China should always be respected. And from the business side, China, as world's fastest-growing economy, is also the most significant market for all French companies," said the Frenchman, who is the president of Michelin China.

The French tire company was one of the first foreign companies to tap into the Chinese market after the country launched its reform and opening-up policy. It established a sales office in Hong Kong in 1988 and a representation office in Beijing in 1989. Its first manufacturing facility in China was inaugurated in Shenyang, Liaoning province, in 1996.

"Michelin's 25-year development in China has been fantastic and successful, thanks to our strategy - Go With China. The country is now the most significant market for Michelin and looking forward to the future, we have full of confidence in achieving continued success with China," said Verneuil.

Over the past 25 years, Michelin has invested approximately 3 billion euros ($3.86 billion) in the China market.

"The great investment and efforts we have made, have resulted in brand recognition in China stronger than it is in Europe - above 90 percent," said Verneuil. "This says a lot about the work which has been done by every Michelin employee in China over the last 25 years and about our customers' satisfaction."

"There will be further investment to fuel our development," he added.

Michelin is currently investing $1.5 billion to establish the largest Michelin tire plant in the world in Shenyang. It is being equipped with the most advanced equipment and will produce 12 million high performance car, truck and bus tires a year.

"China's economy has been developing rapidly in recent years. The car industry, especially, shows huge potential. In China, about 1,000 Chinese people own 80 vehicles on average, which is about 10 times lower than that in Europe and the United States."

He predicts that by 2025, China's tire market will have more than doubled, to a size similar to that of Europe.

Verneuil also believes that as the country faces environmental and energy challenges, Michelin, which is recognized worldwide, not just for safety, reliability and comfort, but also for its performance in increasing fuel efficiency, can help support the government's efforts to create a greener and more efficient society.

"Michelin is a company that's driven by sustained innovation. Thus we attach great importance to R&D. To better respond to the demands of Chinese consumers and adapt our solutions to the Chinese market, we invested in a new research, development and innovation center last year in Shanghai, and will continue to boost it in next 12 months," said Verneuil.

"Our purpose in China, and worldwide, is to give people 'a better way forward'," he said

In November, the 12th Michelin Challenge Bibendum, an innovative think and action tank promoting clean, safe, connected, accessible, and affordable mobility, will be held in Chengdu, Sichuan province.

"China will be the first country in the world to host the global event three times," said Verneuil. "And unlike the previous editions, this time we will talk more about issues such as the connection between vehicles and the city, and invite more participants from other industries, for example IT and energy."

Moreover, he told China Daily that the French tire-maker's success in China was also supported by its tailored five-focus development strategy - close to customers, product offerings, manufacturing, distribution and people - aimed at making lives better with sustainable mobility.

Since the setting up of its first Tyreplus automotive service center in China in February 2003, the network has been expanding rapidly in the country with more than 1,000 shops covering major cities in all provinces.

Currently, Tyreplus, Michelin's automotive aftermarket services provider in China, is one of the biggest in the country with a service portfolio covering maintenance and the replacement of brake systems and engine oil, as well as tires.

"Michelin's distribution and service network will also expand to more lower-tier cities in the western region," said Verneuil.

Besides its tire business, Michelin Maps and Guides, and Michelin Lifestyle bring added value to the Michelin brand, and share the same mission of "better mobility".

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