Michelin couv courteGB

Strategy
● The quality of Michelin’s research
and its global dimension make the
Company a strategic partner for car
manufacturers. Original equipment sales
allow Michelin to spread its technological
innovations and to win consumers’
loyalty at tire replacement time.
● In the Replacement market, the Group
offers the Michelin brand, the global leader,
plus a quality multi-brand portfolio aimed
at meeting the varied needs of consumers and
distributors. It expanded its range of services
to consumers and strengthened ties with
all of its distribution channels.
● Both in Original Equipment and Replacement
tires, Michelin focuses on fast growing technical
segments that offer high added value.
● In order to adapt its industrial strategy to
its market strategy, Michelin boosted its
productivity and flexibility while raising
its production capacity to satisfy strong
demand from emerging markets.
No.1 worldwide,
Michelin, the preferred brand
of consumers
18% of the world’s Original
Equipment and
Replacement tires
72% of Michelin’s Passenger Car
sales are in replacement
2004
• Despite slow market growth compared with 2003 (with
replacement up slightly and original equipment stable),
Michelin posted Net Sales up 0.9% and sales down just
0.1% in volume terms although the dollar’s and other
currencies’ depreciation against the euro eroded over half
of its sales in this segment.
Operating margin rose 0.9 of a point to 9.7%, the
Passenger Car-Light Truck segment’s best performance in
the past five years.
• One of the highlights of 2004 was that the Michelin
brand won market share in the Replacement market in all
of the target segments in North America, Europe, Japan
and in high-growth markets like China.
A targeted growth strategy
that delivers sustainable results
A winning targeting strategy for replacement tires
In Europe, total sales for Passenger Car and Light Truck tires
were in line with market growth. However, sales rose much
faster in the Winter, High Performance and Leisure segments.
The increase was matched by stronger market positions for
the Michelin, Kleber and BFGoodrich brands. The superior
quality of the Group’s products was behind the resounding
success of Winter tire sales in Europe, particularly in Germany,
in Eastern Europe and in Scandinavia. ADAC* awarded the
Michelin Alpin brand three stars for the third consecutive
year, and the Michelin X-Ice product line was successfully
launched. The clear progress made in the supply chain as well
as well-orchestrated distribution initiatives were also contributing
factors.
*Allgemeiner Deutscher Automobil Club.
Strategy • Fundamentals Businesses Earnings
Passenger Car–Light Truck
Passenger Car/Light Truck Total Number of Replacement Number of Original
(Change in number of tires) Replacement Market Original Equipsold
2004 / 2003 tires Equipment ment
tires
Total ( 0.1%) + 1.8% NA (4.7%) NA
Europe* = + 3.3% + + 0.9
North America** - + 1.6% - - (0.5)
* Western and Eastern Europe (excluding Community of Independent States).
** United-States, Canada and Mexico.
“=” : performance +/- 0.5% compared to the market.
“-” : performance between - 2.5% and - 0.5% compared to the market
“--” : performance > - 2.5% compared to the market
“+” : performance between 0.5% and 2.5% compared to the market
“++” : performance > 2.5% compared to the market.
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