Michelin to establish tire plant in Mexico
Mexico: Global
tire manufacturer Michelin announced their plan to set up a new factory in
León, Guanajuato state of Mexico with an investment of USD510 million spread
over two years. The new plant once operational, would have a capacity of
producing 4 to 5 million tires for passenger cars and light trucks annually.
Key reason for establishing new tire plant in
Mexico can be attributed to close proximity of the plant to the markets where
tires are sold in. Moreover, the plant is also in close proximity to the location
of 18 large car manufacturers operating in Mexico.
The company believes that the major reason
which influenced Michelin’s decision to set up a facility in Mexico was majorly
due to sharp growth in the country’s automobile market. By setting up this plant,
Michelin’s count will increase to 69th production unit worldwide and
21st in the North Americas.
“The new plant reflects our ability to take
advantage of growth opportunities in the dynamic North American market, and to
make our manufacturing operations more agile by deploying tire ranges that
integrate innovative technology,” said Jean-Dominique Senard, CEO of Michelin.
According to a recent report published by TechSci Research, “Mexico Tire Market
Forecast & Opportunities, 2021”,
Mexico tire market is projected to grow at a CAGR of 10.6%, during 2016-2021.
Expansion in production capacities of the OEMs coupled with rapid infrastructure
development and increasing urbanization are the key factors attributable to the
anticipated growth in Mexico tire market over next five years. In 2015, the
country’s tire market was dominated by passenger car tire segment, followed by
light commercial vehicle tire segment and heavy commercial vehicle tire
segment. On account of increase in production and sales of passenger cars, the
passenger car tire segment is expected to continue its dominance in the
country’s tire market during the forecast period. Bridgestone, Michelin, Tornel
and Continental are the leading tire players operating in the country, and
their cumulative market share in the country’s tire market stood at more than
50%, in volume terms, in 2015
As per TechSci Research,
the strategic move taken by the company is anticipated to facilitate increase
in market share in the North American tire market. The company plans the launch
of a wide range product portfolio in this segment giving an added advantage to
the customers to choose from variety of options. Further with major focus of
the company on OE’s the company believes this move is expected to increase
their market share in the Original Equipment segment.