Michelin: Building a "move forward" business ecosystem

In 1995, Michelin set up a joint venture in Shenyang, and Mr. Michelle tires of the gas came to China formally. Since then, Michelin Shenyang Truck Tire Co., Ltd., Michelin Light Truck Sedan Co., Ltd., and Michelin Shenyang Rubber Components Co., Ltd. have all been established. Michelin has gradually expanded its production capacity in China.

In April 2001, Michelin invested US$200 million in a joint venture with Shanghai Tire & Rubber Co., Ltd. to establish Shanghai Michelin Warrior Tire Co., Ltd. The Michelin Company began to implement a multi-brand marketing strategy in China, which is focused on the launch of two Michelin and Warrior brands, of which Michelin products are mainly targeted at the high-end market, while Warriors are focused on serving the mass market. After the acquisition of America's Bauluche Company, Michelin also promoted Bauluche tires to Chinese young people who are looking for driving passion and fun.

In just 10 years, Michelin has gradually established an industrial layout that spans north and south China. From sedans to trucks, it meets China's multi-level market demand. At the same time, it has continuously expanded its sales channels and increased cooperation with car manufacturers. Michelin has actively built its own business ecosystem.

Active tire technology

Products are the root of the entire business ecosystem. Michelin has made many impressive achievements: the first car tires in history, train tires and truck tires; the first detachable tire was introduced in 1906; the inner tube was integrated into the tire structure and became the originator of the tubeless design; the first one was made available Snow tires that are automatically sharpened by tread blocks; first aircraft and motorcycle radial tires. In China, Michelin has also been tirelessly improving related products. In 2003, the EnergyMX V8 was launched specifically for high-end luxury cars.

Change is an intrinsic property of the business environment, and the business ecosystem should change as needed. With the advent of the post-oil era, Michelin has stepped up its cooperation with automakers and evolved its own ecosystems through relevant technological innovations. At the Paris Motor Show in 2008, electric car manufacturers France Heuliez, Michelin and Orange announced WILL, the first electric vehicle to integrate Michelin's active-wheel technology. Thanks to the use of the Michelin Active Wheel System, WILL's power train is designed into the wheels. Each front wheel contains a motor, a revolutionary electronic suspension system, tires and braking system.

The close cooperation between modern industry chains makes the innovation and reform of a company also affect the efficiency, innovation and vitality of other members of the entire system. The transfer of key components has liberated the constraints that vehicle shape designers had previously been unable to overcome – because the removal of the engine assembly has significantly reduced the weight of the car body, Heuliez has completely remodeled the chassis, and the new underbody design makes the vehicle become Lighter.

Lighter weight vehicles also mean that energy consumption will be significantly reduced. WILL's energy efficiency is outstanding, and its motor energy efficiency reaches 90%. When driving in a city, the energy efficiency of ordinary vehicles is only 20% at most. In addition, WILL's well-to-wheel emissions (from raw materials to use) are less than 15 grams per kilometer when hydropower, photovoltaics, wind power, or other clean energy sources are used.

This car is expected to be launched in 2010. At present, Michelin is also actively discussing the development of electric vehicle power systems with domestic battery manufacturers and battery material supplier CITIC Guoan Mengguli. The power system will use Michelin's drive-wheel technology and carry lithium batteries from Nugget, and the electronic control system will be jointly developed by both parties.

Pyramid service network

The realization of product value depends on the continuity of the entire ecosystem. When a good product reaches consumers and achieves zero distance, it must pass through the relevant retailer. Currently, Michelin has the largest professional tire sales and service network in the industry in China. By the end of 2007, it had more than 3,500 retailers of car and light truck tires and 1,800 truck and car tire retailers.

Michelin's entire retail system presents a pyramid structure. "The bottom part of the pyramid is made up of Michelin-approved dealers. On top of this, it consists of the MCR (Michelin Certified Retailer), where the storefront will be larger than the bottom storefront, offering The top level is mainly composed of Tyreplus.” Chairman of Michelin (China) Investment Co., Ltd., Xia Yifu, general manager of Michelin's passenger car and light truck tire production line in Asia Pacific, told Business Weekly "Introduction said that Michelin has more than 500 Chijia stores in the country. Chijia stores are based on blue and green colors. A huge yellow abstract pattern represents the speeding tires." Chijiadian Stores are tidy, spacious, and bright. Staffs wear uniforms and provide convenient and professional services to consumers according to standard services and operational procedures.

In addition to the system of designated retailers, Michelin has also increased close cooperation with various auto manufacturers. This is not only reflected in the original tire market, but also in the automotive 4S shop. Michelin conducts in-depth tire knowledge maintenance and training on the 4S shop technicians and maintenance personnel of the partner manufacturers.

China's tire market is highly competitive. Michelin faces not only international giants such as Goodyear and Bridgestone, but also five large domestic competitors, 20 medium-sized rivals, and more than 300 small-scale rivals. “In the future, these companies will gradually increase their service content in their tire sales.” Xiayi Fu said.

The appeal of services to consumers is very large, and Michelin's high value-added services are also conducted through sales channels. In March 2006, Michelin launched the “along with you” service. Its core content and service measures included emergency roadside assistance and tire rescue 24 hours a day, as well as the most professional and timely free tire repair and maintenance. According to Nielsen's 2007 survey data, Michelin's "Follow Yourself" brand ranks first in terms of after-sales service in tires, up to 48%; after learning about the "As You Go" service, consumers purchase Michelin tires. Intention increased by 39%. Another third-party survey agency data showed that the members' satisfaction with Michelin's “along with you” service was as high as 89%.

In 2008, Michelin's “According to You” membership has exceeded 500,000. The service network covers 200 cities in China and has about 2,000 designated retailers. In March 2007, Michelin, who had won the first round of competition, launched the “Michelin Card and Bus Specialty Store” project in China, which included sales, consulting and service. In June 2008, Michelin launched the “Military Carefree Bus and Passenger Car Club” project.

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