Michelin Plant to Enter India, Produce Tyres by November 2012

As the Indian auto market continues rising, ancillary players along with global manufacturers have begun entering this market. According to reports, French manufacturer of tyres, Michelin said that they would be hiring around 1,250 employees for their new plant in Chennai.

This Chennai plant is projected to produce the company’s first truck and bus tires in November, 2012. Reports quoted Michelin, head of global tyre and truck business, Pete Selleck, saying that they are looking towards manufacturing around 3 lakh tyres in their first phase of operation. They plan to later on increase production to 2mn units. Selleck, however, declined to specify a time frame regarding when they would be increasing their production capacity.

The company had reportedly planned on investing in their Chennai plant around Rs.4,000 crore, which they have already begun constructing. Michelin have already hired 250 employees for their new plant, and are planning to hire more 1,250 employees in the coming few years.

Michelin is reportedly planning to source their raw materials from India. They are in the middle of judging the availability of raw materials in India. They are also expanding their network of dealerships, apart from having talks with bus and truck makers for sales in OEM. Currently Michelin is partnered in India with Volvo. Selleck added they are having talks with other players as well.

According to reports, India accounts around 1% of the global sales of Michelin, holding an important potential for them, as bus and truck owners are increasingly opting to chose fuel efficient tyres. Selleck was reported as saying that, fewer than 15% of the buses and trucks in India use radial tyres. Because of this, the scope of radialisation is more in India, in comparision to markets like Brazil and China, where radial tryes are used in 50% of their buses and trucks.

Besides India, the company is also setting up their plants in China and Brazil. In order to understand the Indian customer’s requirements, Michelin has developed a field engineering group pf six members. As the company advances, it is possible that they will launch a product built specifically for Indian markets and are likely to set up an engineering and research teams by the next decade.

Currently, the company has an R&D team based in Bangkok, while they import products from their plants in Europe for selling in this market. The company will continue importing tyres to India till 2015, and would then produce them locally.

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