Michelin recently completed gruelling and independently verified testing of its Energy Saver + tyre with a marathon 30,000 km road trip starting in its home town of Clermont-Ferrrand and finishing in Stockholm.

Marketing director, car and light truck business, Gary Guthrie, spoke to Simon Warburton in the Swedish capital about what the new Energy Saver + means, how Michelin is coping with the current downturn and the impact of new European labelling legislation.

j-a: How do the two new tyres – Energy Save + and Agilis + (LCVs) – fit into the Michelin portfolio?

GG: “These are two of our most important products in Europe and with [their] launch, we have completed a renewal of 80% of tyres that we sell in Europe.

“We have transformed our research and development processes to bring our products to market – we have 6,000 people in R&D and if we didn’t we would not be able to it.”

j-a: Why would the consumer buy the Saver + tyre in a time of austerity?

GG: “Saver + saves 200 litres of fuel compared to the European standard. At today’s prices of diesel in France, it would be EUR315 over the lifetime of a tyre. Energy Saver + brakes 16m shorter than the European standard.

“We look at external third parties such as DEKRA to verify the results of our tyres relative to our competitors. We are comparing like-for-like on this testing – the tyres were bought from the market.

“Nobody has done anything on this scale before – it is the largest tyre test in real-world conditions – it was quite expensive but it was worth it. The criteria for choice was the latest offerings by our major competitors in Europe on the dimension of the particular vehicle we chose for the test.

j:a: Michelin ended up in Stockholm just as new European legislation concerning consumer tyre labelling is about to enter the market – what is your view – is there too much legislation? Do you welcome the mandatory labelling from 1 November?

GG: “The labelling is a really big help because it gives the consumer objective information about three performances under, grip, energy consumption and noise.

“With that information, the consumer can see the difference between tyres and it is up to us to clarify what that labelling means. We think the labelling is a great initiative – it is a great start but tyres do a lot more than that [Michelin operates 400 different types of test].

“Michelin has made a big contribution to the new labelling, particularly helping the European Union establish the right levels of threshold and right levels of testing. It is very important this labelling is credible and testing levels have to be robust – we are happy with the outcome.

“The European Union has said they will reconsider this labelling system in around 2016 – we will see what the reaction of the consumer is to it and how it beds in. We will contribute to the debate.

“Labelling is only one part of the story [however]. We as an industry and distributor of tyres have a responsibility to educate the consumer about what is important – when it is -20 Celsius it is much more important your tyres are able to cope with ice and snow.

“The label is not always the best way of communicating that information – most of the best ways of communicating tyre performance are before the consumer has put the tyres on the car. So the dealer is terrifically important. We have 12,000 dealers around Europe who are currently receiving education on labelling, what it does say and what it does not say, to make the right recommendation for the consumer.

“Our other big focus is through our websites, because 50% of European customers, this [is how] they think about new tyres – [they] first type into google.

j-a: There has been much talk in the UK recently about standardising tyre fitting to suit seasonal conditions despite a relatively benign climate. Do you think winter/summer tyre fitting should be standard across the EU?

GG: “Our view is consumers should be encouraged or in the German situation, forced, to adopt the right tyre for the road conditions where they are.

“For example, in France, there are parts of the Alps which require winter tyres and in Paris they are not required. Most people who have driven on winter tyres see immediately the difference they have.

“Our objective is to provide tyres that present the best solutions to consumers’ needs – the tyres we offer in China would not necessarily be the same we offer in Europe.

“We have 60 technicians who spend their lives measuring road conditions, measuring performance of tyres in these road conditions spread around the world. They also investigate tyres that have been taken off cars to see why they have been taken off – what real-world problems were they facing?”

j-a: Run-flat tyres have been a source of contention for many consumers – are you in favour?

GG: “Run-flats are a solution to a problem that a consumer is increasingly faced with as many manufacturers are reviewing spare tyres. It is up to us to work with the manufacturers to find the best solution to the potential problems.

“The requirements for extended mobility are set by the manufacturers and we meet that promise. We see it as a segment of the market that will probably continue to grow.”

j-a: How does Michelin view the outlook for the automotive industry in the current difficult economic climate and are your safety initiatives realistic in a time of austerity?

GG: “The big challenge is the number of cars on the streets will double – that will put pressure on resources. We have not seen the drop of the petrol price – not by a long way. [There are] issues around global warming, noise pollution.

[Also], One million road deaths cannot become two million in twenty years – it has to become fewer. We are one of the founder participants in the United Nations Decade of Road Safety, which has the objective of saving millions of lives in the next ten years.

“We are in the process of launching an initiative with the FIA to establish ten golden rules. One of the major challenges in road safety is the number of new drivers getting their first car, especially in India, China and Brazil.

“They don’t have rammed into them from an early age road codes, so there is a really big opportunity around education, that is one of our major focuses. Most accidents happen after you apply the brakes and with better tyres, some accidents you can avoid completely and a very large number, you can reduce the impact speed. It is impact speed that hurts people.”

j-a: What is your view of tyre pressure monitoring systems that are about to become mandatory?

GG: “Tyre pressure monitoring systems will become more and more prevalent, it is generally a good thing.

j-a: How is Michelin adjusting to the current global financial challenges?

GG: “The results are good – we are growing worldwide. Most big companies in Europe are feeling the economic headwinds at the moment and Michelin is no exception to that.

“The instability in the Eurozone is affecting everybody. Our main focus is to adjust production in line with demand and to be as flexible as possible – demand will return.

“In 2008/2009, it was exactly the same situation, we had to have some temporary production cuts and some temporary reduction in hours. As soon as demand came back, everybody was working full-time again.

[A number of Michelin factories across Europe, such as Dundee in Scotland, have reduced output to manage market requirements and stock conditions.  Dundee has been impacted as the main issues in the market centre around the smaller car tyre ranges which Dundee produces. [Dundee stopped production for a three week period from the end of May until mid June, while during July and August the plant has a number of closure periods to facilitate employees’ holidays, with some of these extended. The impact on employees will be limited to moving time to accommodate training and then banking time for use later in the year or in 2013. Michelin says there will be no impact on jobs at Dundee, but it will delay some of the investment plans announced in 2011 during the next 5 years].

j-a: How would you characterise relations with your unions?

GG: “One of Michelin’s core values is respect for people and that is lived on a daily basis through the company and ensures stability of industrial relations. In general, we have extremely constructive relationships with all of our workforce, [which] is around 110,000 globally.