Left: Scott Clark (right) with Pete Selleck, Michelin’s North American CEO, introduced the Pilot Sport All-Season 3+ at the 2016 North American International Auto Show in Detroit, USA
What trends are you seeing in the North American passenger tire market?
On the OE side, despite the low fuel prices, there’s still a big focus on lowering rolling resistance without sacrificing other areas of tire performance. On the replacement side, the US Congress just passed thresholds for tire performance in the wet, and for rolling resistance.
We’ll see those implemented in around 2018 – if you don’t have a minimum level of performance, you won’t be able to sell your tire in the USA. The precise levels have yet to be set by the National Highway Traffic Safety Administration (NHTSA), but the test methodologies have been defined. As a technology leader, we’d prefer stringent [performance]targets. We think that’s best for the consumer, and we will push hard for demanding thresholds.
How do you keep North American manufacturing competitive?
We work every day to improve the productivity and flexibility of our plants. There’s no silver bullet – it takes a lot of hard work and investment. The most recent investment was US$250m into our plant in Lexington, South Carolina, to add capacity. We’ve also invested into the Uniroyal Goodrich plant in Fort Wayne, Indiana, plus smaller investments at other facilities.
What share of the OE/replacement markets do you aim for in North America?
We’re not obsessed with a particular number. In OE, our desire is to be in partnerships with manufacturers who really value tire performance and to target vehicles that we feel are a good fit with our brand. That takes us to a 20-25% share of the OE market, which is about right. On the replacement side, that’s about the same share we’re shooting for as well. Given the price premium we command on a Michelin tire, we accept that not all consumers will want to buy a Michelin, but if we can end up with 20-25% of the market for our portfolio of brands, that’s probably our sweet spot.
How do you view the North American consumer’s appreciation of tire technology?
It’s a challenge, as it is everywhere. The reality is, tires are often marketed based on a price point and a mileage warranty. One of the challenges we face is how to convey, in a consumer-friendly way, the technology in, for example, the Premier A/S. We try to do that online and in all of our communications, but it remains a challenge. The average consumer does not know or care enough about what’s in their tire and how that impacts on performance. It’s not that we want consumers to be scientists, but it’s the tire manufacturer’s responsibility to tell the story in a simple way. We’re trying to make a better job of that.
What goals do you have for the coming years?
In 2015 we launched five new products in North America, across our brands. Our goal now is to ensure those products continue to perform well. One area of focus is explaining to consumers what makes our tires different; another is to become easier for our dealers – our customers – to do business with and improve our supply.
January 13, 2016