After seven years in marketing and product planning for a French car manufacturer, Pierre-Edouard Sorel joined Michelin in 2005. He started as a sales representative in France in trade marketing. At the end of 2007, he headed the market intelligence department of Michelin’s Earthmover tyres product line and has been marketing manager for winter tyres in Europe since 2011 Sorel talked to Simon Warburton about legislation, labelling and the dealer benefits of winter tyre usage.
j-a: To what extent are winter tyres now becoming popular?
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P-E S: The winter tyre market is now one third of the replacement market so it has become huge. The market has become so big because we have had regulations – the market has jumped from 40m tyres in 2002 to 85m-90m in recent years.
It is important for us – that market is growing which is not the case for all markets in western Europe [as] car sales are challenging.
j-a: Can you outline some winter tyre market opportunities?
Obviously in the Nordic countries it has been one [winter tyre market] for years and years. It is mandatory in Nordic countries from November to April.
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By GlobalDataThen we have had legislation in central Europe, especially Germany from 2007. In Germany, the legislation is a bit different – it is from 1 November to 1 April. It says if weather conditions last and you are not using winter tyres and either you get stuck or have an accident, you will get a fine.
If you have an accident and get some damage, the insurance will not pay for the cost. Our recent studies show 88% of [German] people use winter tyres.
Everyone in Munich [for example] is putting on winter tyres. If you go to Hamburg, you don’t get a lot of snow, but people do it anyway.
j-a: Does legislation vary from one country to another?
P-E S: The legislation is still expanding – we had Turkey last year which had legislation. In France, we expect to have some kind of legislation, but not the same as Germany. In France, you can not influence a law if it is not proportional, for example in Brittany where it never snows.
We have had very local legislation in Italy [and in fact] most countries have legislation. Poland does not have [it], but the market is very winter ripe [while] 45% of the market is in Germany, Switzerland and Austria.
j-a: Despite that dramatic use of winter tyres in central Europe, the UK appears to be stubbornly resistant. What is Michelin’s view?
P-E S: We sell winter tyres in the UK – especially Scotland but the difficulty is people associate winter tyres with snow. It is very difficult to get people thinking about winter tyres if they are not driving on snow.
I have been living in Paris for years and coming to Clermont-Ferrand, everyone was doing it because they don’t want to get stuck. It is really a question of safety.
When you look at the performance of a winter tyre, when it is gets cold and rainy, which happens quite a lot in the UK, there is a big performance gap in terms of braking distance.
j-a: Do you think cost is an issue that puts some people off buying winter tyres?
P-E S: The car makers have to propose solutions – if you take Germany for instance 80% of Germans have two sets of wheels. When you are using winter tyres you are not wearing [down] summer tyres. You are just putting more money up front – it is not exaggerated cost.
From a cost side, it is not such a big deal. Cost may be 15% higher of the overall tyre budget. We don’t have any data proving winter tyres last longer – they last the same.
The market is really driven by performance – is really a performance and product-driven market.
j-a: How does the consumer market regard winter tyres?
P-E S: German newspapers are testing everything all the time and people are buying tyres based on test results.
The market is changing very quickly – we are changing tyre lines every four years whereas the summer market for instance we have longer-lasting tyre lines of six to seven years.
j-a: What about storage? Do dealers generally take care of it and if so, do they see a benefit?
P-E S: In Germany, 40% of people store their tyre at car dealerships, it is really something that is organised. From the dealer perspective [it is] really a profitable business because you are selling space.
It is also a very good service business for dealers, because you get customers coming twice a year instead of once every two and a half years. They love it.
The problem they have is they have to pay for extra staff…handling the flow of customers. It is really a game changer for car dealers and tyre dealers. It is a way of selling additional services.
If you look at Sweden, you would have the dealer calling you in August and saying your winter tyres are worn out and it takes 15 minutes to change the tyres. It is a better way to do business.
j-a: What about tyre noise levels – is that something Michelin is evaluating?
P-E S: Cars are getting lighter, it is true and whether from a summer or winter perspective, we are stating thinking now about having tyres that are less noisy.
Even without electric vehicles, we are trying to find solutions. But when you buy winter tyres, you are focused on safety. You want to be sure you can take a bend on the snow without getting [off] the road.
j-a: To what extent is Michelin working to lobby institutions such as the European Commission on tyre issues?
P-E S: We are part of the European Tyre and Rubber Manufacturers Association and usually it is that association working on lobbying. There is also an association in France.
It is not just Michelin, because if you have a law on winter tyres…you need to be sure you can supply tyres like our competitors. That kind of law can be actually annoying for customers if it is not dealt with in advance.
Usually, we try to advance the same subjects. If a law is just in one country…it is a problem for the industry as a whole.
j-a: Labelling has become an issue for manufacturers detailing wet grip, fuel efficiency and noise. What is Michelin’s view on winter tyres?
P-E S: We have labelling for winter tyres apart from studded [ones]. Labelling for wet braking, for example for [the] Alpin 5, we have a B rating. If you take a rolling resistance label for Alpin 5, it is E. It is about market average. The fuel label and rolling resistance label is a good indication.
You don’t have snow performance labelling. You need to look at other sources of information, maybe some tests.
Snow labelling is very difficult because snow braking performance of a tyre depends a lot on [whether it is] 08:00, 10:00 or noon because the snow is very cold then, really performance can change a lot.
There are a lot of discussions with our industry partners – how can we have normalised regulations with snow labelling – it is really difficult. Don’t even think about [it] for five to ten years.
j-a: Does Michelin regard the winter tyre market for fleet operators with enthusiasm?
P-E S: The UK market [for example] is a lot with fleet and we have to explain what is the benefit. You are going to be [hit] at some point by some snow – that is the moment – we need to use that moment.
