Europe’s biggest tyre maker, Michelin, expects sales in the Asia-Pacific region to grow as a result of booming demand for vehicles in China and India, a top company official has said.
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“Asia-Pacific is today a huge market and is growing at above 5% a year. It means that Asia-Pacific will the biggest market in 10-15 years… we will be investing several hundred million dollars in the region in five years,” Michelin’s Asia-Pacific president Jean-Marc Francois told Reuters, adding: “About 10% of (global) sales are from this region and this percentage is growing every year.”
The report said Michelin, whose traditional strongholds are Europe and America, expects the global tyre market to expand around 1-2% in 2004.
Francois reportedly said the main markets for Michelin in the Asia-Pacific region are Japan, China, India and Thailand – China, the world’s fastest-growing major vehicle market, saw car sales surge 75% in 2003 to a record 1.97 million units though growth is expected to slow down to 20-30% this year.
“Our capacity is increasing by 25% every year in China because this is what the market is demanding,” Francois told Reuters, adding a fifth of Michelin’s sales in the region came from that country and the contribution was growing: “China is the biggest market of tomorrow.”
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By GlobalDataFrancois reportedly said the Indian truck market would attract more attention from global tyre makers as a new network of national highways being built by the government would spur demand for radial truck and bus tyres.
Reuters said tyres for buses and trucks make up more than 70% of India’s $2.2 billion tyre industry but less than 2% of tyres are radials in comparison with more than 80% of the heavy vehicles market in Europe and 60% in the United States.
“India will soon become one of the largest truck tyre markets worldwide,” Francois told Reuters, which noted that Michelin owns a 14.9% stake in the country’s Apollo Tyres.
