Groupe Michelin is on target to meet "its competitiveness improvement objectives," according to Managing Partner Michel Rollier.
At a recent conference with investors in Paris, Rollier reiterated that the company's strategy, announced in 2006, is built on three foundations:
* enhancing its competitiveness through continuous improvements in productivity and cost reductions;
* expanding in new markets; and
* creating product and service differentiation through innovation.
Productivity improvements/cost reductions
Rollier provided an update on the deployment of Michelin's Horizon 2010 strategic plan, and focused on the program designed to cut internal spending by 1.5 billion to 1.7 billion euros by 2010 (as compared to 2006). In the first 18 months of the plan, costs have already been reduced by a total of 500 million euros in three key areas: industrial operations; overheads, logistics and R&D; and raw materials.
Rollier said he was "particularly satisfied with the efforts made by Michelin teams and with the results obtained, reflecting the Groupe's ability to come together to meet clearly defined, ambitious objectives that aim to achieve operational excellence in all aspects of the business."
Expanding in new markets
Rollier also stated that Michelin would continue to develop in new growth markets, and announced new investment projects in South America and Asia.
In South America, Michelin will increase capacity at its passenger car tire plant in Brazil to meet demand in the replacement and original equipment tire markets in Brazil and the Mercosur countries. (Mercosur stands for the Southern Common Market, a trade organization created by Brazil, Argentina, Paraguay and Uruguay. Bolivia, Chile, Colombia, Ecuador and Peru are associate members, and Venezuela is being considered for membership, according to answers.com.)
In India, Michelin is in "advanced discussions" to acquire land on which to build a new plant for truck and earthmover tires.
Creating product and service differentiation
Michelin recently introduced Michelin Energy Saver car tires and Michelin X Energy SaverGreen truck tires. Both tire lines are designed to reduce vehicle fuel consumption "while delivering outstanding performance in terms of safety and longevity," says the company.
The investor conference coincided with the Paris Motor Show.
