French tire manufacturer Michelin Group is banking on huge growth in China thanks to the growing demand for mobility and improved life style solutions, a top company official said.
Bruno de Feraudy, president of Michelin China, said the company is eyeing not just being a tire supplier but a mobility experience brand that plays an integral role in consumers' daily lives, ranging from car maintenance to fashion wear and from holiday trips to dining options.
Sales of passenger car tires, light truck tires and related distribution rose 4.1 percent year-on-year globally to 9.24 billion euros (.76 billion) in the first nine months of 2017, according to the company's latest quarterly report, and its specialty business, including earthmovers, agricultural implements, two-wheel and aircraft tires, Michelin Travel Partner and Michelin Lifestyles rose 18.4 percent year-on-year to 2.54 billion euros.
The report did not specify the China market performances, but De Feraudy said that China market has been growing at a fast pace in the past few quarters thanks to a handful of measures offering consumers easier access to the company's solutions, such as Tyre Plus, a network for tire replacement and automobile maintenance services.
The company has been updating its brand and images in the China market as a part of its global campaign to deliver a message that Michelin is "reaching closer" to consumers.
Tech-savvy, new generation of consumers are not going to consume what they are told to. On the contrary, they collect information from various channels and wish to share their opinions, and have tailor-made solutions. Michelin will allocate more resources to listen to consumers, said De Feraudy.
Changes are made to the image of Michelin Man, which has been transformed from previously three-dimensional to two-dimensional, so as to better suit digital communication.
Client services are delivered through on-site, phone calls, websites and instant messaging systems such as WeChat, said De Feraudy.
"We are not going to compete by lowering price to win market share. We always focus more on the quality side, and Chinese consumers are also increasingly valuing quality," said De Feraudy, adding that quality-driven consumption is a key growth driver for Michelin's business in China.
The company has been developing guides for tourists and diners in China, and has launched sportswear using Michelin technologies and rubber materials, such as shoes.
This segment contributes only a small fraction currently, but is expected to grow fast and help drive sales in other segments, helping the brand to deliver a holistic message to consumers that Michelin plays more roles in everyday life.
According to research by McKinsey, a global consultancy services provider, China's mobility market will be more diversified in the next few years with rising demand for car-sharing, and more consumption will be generated by new technologies applied in automobiles, such as artificial intelligence and virtual reality.
"Integration of technologies and cross-marketing will be more widely observed in the entire mobility market. Entertainment, life style, travel, dining, and retail are likely to be connected to one another, bringing more opportunities to carmakers, parts suppliers and merchants alike," said a research note from CITIC Securities.