Michelin treads firmly into tech territory

Chief says China unit eyeing fast growth through an online-to-offline strategy including e-commerce, apps and online sites

Bruno de Feraudy doesn't think of his business as characterized only by the loud sounds and oily aroma of a tire repair shop.

Instead, De Feraudy, president of Michelin China, has a vision more up to date with the times, one not only of physical mobility, but the online kind, too, and how the two can be combined.

"At Michelin, we do not regard our business as tire makers. Instead, what we do is to facilitate better, safer, and more enjoyable mobility," he says as he overlooks streams of vehicles from his office in a tower in Changning district, a busy part of Shanghai.

De Feraudy, a senior executive of Michelin China since 2012, has given a lot of thought to the tumultuous growth of the automobile industry in the world's second-largest economy.

He says mobile communications and mobility business have many things in common, and to combine the benefits of the two will greatly improve efficiency. Already, traffic engineers are using the Internet in a range of traffic reporting and control systems.

The number of potential uses of online communications for vehicles is staggering in China. Between 2013 and 2015, the compound annual growth rate of the automobile service market, which includes changing tires, reached 19 percent as the number of vehicles in China rose, according to the China Association of Automobile Manufacturers.

An association report says the size of the after-sales automobile service market in China has reached 700 billion yuan ($106.9 billion; 98 billion euros), and is expected to grow to 1 trillion yuan by 2018.

Among the 150 million car owners, more than 50 percent are under age 35, and more than 30 percent are under 30. "To win in a tough market with knowledgeable customers, you really need to keep updated and flexible with consumers' demands and concerns," he says.

De Feraudy says Michelin China is eyeing fast growth through e-commerce and has been making efforts to harness mobile phone apps and online platforms.

A key area is called online-to-offline management, and De Feraudy says China's Internet Plus strategy will help Michelin China expand its business in the country.

Chinese Premier Li Keqiang has said the strategy includes integrating "mobile Internet, cloud computing big data, and the Internet of Things with modern manufacturing" to encourage "the healthy development of e-commerce and to get Internet-based companies to increase their presence in the international market".

Michelin China launched its own WeChat services last year. De Feraudy frequently uses mobile communication tools developed in China to connect with his friends and family. "My children have become ambassadors of WeChat, and their friends in France are using the app, too."

Last year, Michelin China upgraded its website to include search, sharing and user reviews of its products and services. Users can locate the nearest distributor and service center.

This year, Michelin China will expand and upgrade its TyrePlus networks in China, and try to reach more consumers through the one-stop-shop network offering tires and car maintenance services, including Michelin products, BF Goodrich tires, lubricants, batteries, suspension, brakes and air-conditioning systems.

Michelin began using the TyrePlus system in China in 2002, and has serviced 6.68 million consumers since then. By 2020, the network is expected to expand to exceed 2,000 outlets in all the major cities and municipalities, serving 20.68 million drivers.

It is hoped consumers will give a feedback through online platforms and brick-and-mortar networks about their experience while using the company's products and services. The feedback is taken into consideration when the company develops new products. The idea is to meet the specific demands of users in China, says De Feraudy.

He says changing car models, improved road conditions, a focus on energy efficiency and reduction in emissions, and evolving consumption and payment habits are all factors Michelin China needs to closely monitor to stay well-informed about consumer needs.

"Some drivers focus more on the quietness, some value riding comfort, and some want durability and the ability to control the vehicle well while in motion. We need to make sure that the performance of our products and services are all of high quality and safe to meet users' demands."

In his spare time, De Feraudy often drives to explore various locations, including some hidden gems in suburban, rural and remote areas across China.

It's what you might find in a Michelin Guide, which the company publishes in many areas. The Michelin Guide on hotels and restaurants classifies destinations according to comfort and gives star ratings for good food, ranging from "worth a stop!" to "worth a special journey".

China's drivers have long anticipated a special China edition of the Michelin Guide.

"We have been considering launching the Michelin Guide for the Chinese mainland and have been working on it," says De Feraudy.

wuyiyao@chinadaily.com.cn

(China Daily Africa Weekly 03/04/2016 page31)