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World Tire Giant Michelin Joins Hands with Chinese Partner
World tire giant, Michelin, has entered into an alliance with China's Shanghai Tyre and Rubber Co., Ltd. after 30 months of negotiations, company officials said Sunday.
The two sides will soon begin to work together strategically in the production of radial tires for sedans, trucks and buses, among others.
Initially they will start a 200-million-U.S.-dollar joint venture, in which Michelin will take 70 percent of the stakes and the Shanghai Tyre and Rubber Co. the other 30 percent.
The joint venture, to be named the Shanghai Michelin Warrior Tyre Co., is expected to have an annual production of eight million radial tires for sedans and 15,000 tons of wire for tires by the year 2010.
The Chinese partner's trademark, Warrior, which is well known in the domestic market, will be preserved in the joint venture.
Michelin is also scheduled to start a solely owned research and development center in Shanghai.
Edouard Michelin, president and chief executive officer of Michelin, called the agreement a milestone that will reshape the tire market of China.
He stressed the importance of the Chinese market in Michelin's global strategy and expressed his optimism towards Shanghai as the center of the tire industry for both China and the Asia-Pacific region.
Fan Xian, president of the Shanghai Tyre and Rubber Co., said the alliance will offer his company an opportunity to learn from Michelin's world-class technology, craftsmanship, management and marketing skills and sharpen the competitive edge of Chinese tire producers.
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