Michelin couv courteGB

Specialty tires accounted for more than 20% of the world market
in value. While all are highly sophisticated products, cycle tires are
consumer goods, unlike agricultural, earthmover and aircraft tires,
which are genuine capital goods. There are significant growth
opportunities for small and medium-sized earthmovers, machines
for handling goods and for large agricultural machinery as well as
for aircraft radial tires.
Tire distribution
In the Passenger Car-Light Truck segment, manufacturers mostly
rely on distribution networks (some of which they control) for their
sales. In Europe, specialist dealers account for a little over half of
consumer sales, car dealers for more than one fourth and miscellaneous
outlets (including auto centers) for the balance. The picture,
however, varies widely from country to country. In North America,
channels are more diversified, with independent distributors
accounting for a little less than 50% of sales. Car dealers’ share is
marginal, although they are expanding into this business.
2004 Truck tire sales
in millions of units (radial and bias)
Strategy • Fundamentals Businesses Earnings
World Europe North South Asia Africa
America* America Middle-
East
Original equipment 21 - - - - -
Replacement 120 20.6 18.1 10.5 58.3 12.3
Retread 1 58.5 7.4 18.2 9.5 21.4 2.0
1 - Treads.
* USA, Canada and Mexico
Source: Michelin estimates
World tire industry and markets
The Truck market with nearly 140 million tires sold of which 85% were replacements
is worth one third of the global market. Its growth works out to a long-term
trend of 2% a year correlated to economic growth and heavy hauling. Radial truck
tires have bright prospects in Eastern Europe, South America and in Asia, which
alone accounts for 48% of the world market.
Truck tires are capital goods, and account for 3% of a truck fleet’s operating costs
on average. One’s choice of a tire has a significant impact on fuel consumption,
which, in turn makes up about 20% of one’s operating costs. Customers in this
segment are eager to optimize truck uptime and mileage costs. To them, the running
cost per mile of a tire is a key consideration. For this reason, in Europe and
North and South America, the retread market is particularly well developed since
retread operations considerably extend the lifespan of the fleets’ tires.
*Gradual shift from conventional tires to radial tires invented by Michelin.
In Trucks, specialist dealers are the main distribution channel in
developed countries, alongside direct sales to large fleets. Trends
in this sector are for “truck side” maintenance services aimed at
minimizing downtime.
Tourist guide markets are very competitive, marked as they
are by increasingly diversified customer expectations, both as
regards contents and information.
Electronic navigation services show great potential among
consumers and professionals alike, whether they are used on mobile
applications, like personal digital assistants (PDA) in Europe, or are
built into the vehicle.
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