Michelin Contemplating Set-up of Car Facility in India Post 2015

Global manufacturer of tyres, Michelin recently announced that they are considering making tyres for passenger cars and could therefore soon open a plant in India, sometime after 2015, if they feel that the demand is sufficient enough to necessitate opening a big facility.

Currently, the company sells tyres for passenger cars in India, which have been sourced from the South-East Asian market. These tyres mainly cater to after market services, and have a price ranging between Rs.2,000-5,000. The company is at present waiting to see more development of infrastructure in India, before they contemplate opening a big facility.

Florent Menegaux, the president of the company, said that as soon as they witness more growth of infrastructure in India that is when they will open a new plant in India. When asked to regarding any possible timeline, Menegaux, said that it could be after 2015. If they witness the infrastructure grow faster in the Indian market, they will move in faster.

It will all depend on the opportunity in the market. Currently the market is not huge enough to maintain a big facility.  He also said that currently the tyre market for passenger cars is growing rapidly; however, the foundation is still small, and the development of infrastructure in the country is not enough, in spite of the increasing growth for supporting a good market for cars.

Menegaux said that they are as a result they are presently developing their distribution network, and waiting for the infrastructure to develop further, so that they are ready to invest in a car tyre facility after the auto parts develop. He also added that his company is focusing on building their brand although their main investment in the market is for distribution.

Michelin has invested Rs.4,000 crore for setting up a bus and truck tyre plant, to be located in Chennai that will be functional by 2012. The plant will have a production capacity of 3 lakh bus and truck tyres, annually in the initial stage. Menegaux also said that they have invested in a facility for developing truck tyres. The truck market in India is presently more developed, in comparision to the passenger car market, at present.

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