Michelin and the tyre Industry

in India
Group 2
Ankit Kumar - 195
Aparna Johari - 197
Baher Bhadre - 201
Girish Ganapath - 207
Samit Das - 237
Dinesh Kumar V - 248

GOODYE
AR

Product

OTR & Agri

2&3
Wheelers

CV & LCV

APPOLO

FALC
ON
TVS

CEA
T

APPOLO

BIRL
A

MRF

JK
Car

BRID
GEST
ONE

CrossPly

Radial
Technology

APO
LLO

G
Y

BIRL
A

Tubeless

BIRLA

APPO
LO

CEAT

Market

Export

GOODYEAR

MRF

Replacement
TVS

OEM

CrossPly

Radial
Technology

Tubeless

Financial Analysis

Why does Michelin not operate in India?

Presence of strong Indian competitors who are
already well entrenched
On average, input costs for Indian tyre companies
was 65% of sales; for Michelin it was only 24% of
sales. Michelin was wary of high input costs.
Michelin was unwilling to change its tyres to suit
local markets
Michelin was selling heavily to car manufacturers
in other global markets; in India, there was
pressure from car companies to reduce tyre prices
All major tyre manufacturers are earning very less
ROE and ROI in India hence Michelin was not sure
of profits in india

Why and how should Michelin enter the Indian tyre

industry ?
They have an un-balanced market share,
especially in Asia, and they want to expand in this
market. Since India is a huge part of this market,
they should enter India
The growth rate for car market is slowly
stagnating in developing countries whereas there
is huge scope in India which is growing at 7% for
cars and 3% for commercial vehicles
The radialization of commercial vehicle is only 2%
so they have huge scope for growth because they
have specialization in Radial tyres
They should enter through joint venture because
there is huge fluctuation in the raw rubber and
petroleum prices and by entering through this
way they would be able to diversify this risk and
they can share the capital expenditure of setting

Thank You