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Our Growth Strategy

Our Growth Strategy

Built on a foundation of growth, competitiveness and commitment, Michelin’s strategic vision is designed to deliver strong, diversified growth by capturing the full value of its products and services in mature markets and expanding more quickly in new markets. As we continue to make our organization more competitive and cost-effective, the mutual commitment of the Company and its employees will enable us to successfully move forward together.

Objectives for 2015

Provided that volumes grow by 4 to 4.5% in 2014 and 2015:

  • operating income of around €2.9 billion in 2015 with normative operating margins before non-recurring items of 10% to 12% in the Passenger Car and Light Truck tire segment, 7% to 9% in the Truck tire segment and 20% to 24% in the Specialty Businesses;
  • Operating income of around €2.5 billion in 2015.
  • A more than 10% return on capital employed each year;
  • Annual capital expenditure of around €2 billion;
  • Positive free cash flow over the 2011-2015 period;
  • A dividend payout rate of around 30% of consolidated net income, before exceptional items.


Innovation and Differentiation

One of the main thrusts of Michelin’s strategy is to leverage technology and innovation to differentiate its products and services, so as to consolidate its leadership and effectively meet the needs of tire users. For more than twenty years, our innovation programs have focused on delivering sustainable mobility solutions. Today, we are the world’s leading manufacturer of fuel-efficient tires and are spearheading the move towards a product-service system, which consists of selling a service or the use of a product rather than the product itself. For example, trucking companies and airlines can choose to be billed based on the number of kilometers traveled, the number of tonnes transported or the number of landings carried out using tires supplied and maintained by Michelin. We are committed to maintaining our solid lead in this new services-based economy by delivering targeted solutions combining innovative products and services.

With an annual R&D budget of nearly €600 million, 6,000 employees and a patent portfolio that has tripled in ten years, Michelin’s innovation priorities are to:

  • bring new tire ranges to market more quickly;
  • continuously improve performance so that each new range outperforms the previous generation;
  • develop breakthrough innovations to develop totally new solutions to mobility challenges.


Driving faster Growth

Michelin is investing more than ever in the MICHELIN brand, which expresses its commitment to quality and innovation.
MICHELIN brand sales are driving the growth strategy across every product line (Passenger Car and Light Truck tires, Truck tires and Specialty tires) and in every market. The benchmark premium brand, MICHELIN, is widely recognized for the quality of its products and services, and will be enhanced by a multi-brand portfolio. Multiple brands enable us to serve retail networks that want to offer each customer just the right tire without leaving the Michelin Group brand universe.

Because these brands are also designed to help us reach our profitability targets, they will be initially focused on the fast growing segment of competitively priced tires for high-performance vehicles. The BFGoodrich®, KLEBER, UNIROYAL, TIGAR, KORMORAN, RIKEN, TAURUS or WARRIOR brands will be used in their respective markets. Another growth driver is the steady improvement in market access. We are strengthening our integrated dealer networks through acquisitions and stepping up our franchising operations in every market. We are committed to increasing our network of franchised dealers to 5,000 outlets in 2017 from 2,000 in 2012.

Stepping up Capital Expenditure

With €2 billion invested in 2012, Michelin is pursuing a sustained investment policy, led by three objectives:

  • sharply increase production capacity in fast-growing markets;
  • continue aligning plants in mature markets to keep pace with product developments and make them more competitive;
  • develop the information systems needed to meet our operational excellence and quality of service targets.


Three new high-capacity plants are currently under construction, to serve booming markets in India, with the Chennai truck and earthmover tire plant, in China, where car and truck tire capacity will be significantly boosted by the new Shenyang 2 plant, and in the United States, where the new Anderson, SC unit will produce tires for the mining industry.

Improved competitiveness

Improved competitiveness
Michelin pursues its journey towards excellence in order to improve its competitiveness and lower its costs.

Moving forward together

Moving forward together
The Michelin corporate community is made up of more than 110,000 people, representing 120 nationalities.

The changing face of mobility

The changing face of mobility
Road mobility is a key factor in economic and social development.