SHANGHAI -- Michelin is looking to expand capacity in China to meet booming demand for tires in the world's third-largest auto market.
The French tire maker likely will add plants in China and elsewhere throughout Asia as it seeks to expand its market share, said Managing Partner Edouard Michelin.
"Only 2 percent of our business is from China, but it was zero in 1996," he said during the Michelin Challenge Bibendum rally here.
Michelin is the world's largest tire maker. Though the company has a market share of 40 percent or more in Europe, its share in Asia is only about 10 percent.
But Michelin is strong in the passenger-car radial replacement tire business in China - with a 24 percent share, and another 5 percent of market share from its subsidiary, the Michelin Warrior Tire Co.
Michelin is the No. 4 tire maker in Asia but soon should stand second - behind Bridgestone, said Jean Marc Francois, president of Michelin Asia-Pacific.
Michelin employs 5,000 in China, where annual wages for its factory employees are in the $4,000 to $5,000 range - 40 percent to 50 per-
cent higher than the typical Chinese factory worker's earnings.
The Shanghai Michelin Warrior Tire Co. plant soon may be producing more tires than any other Michelin plant worldwide, Plant Manager Gary Scheide said.
Asked whether such factories in China might soon be a source of tires for other countries, Francois said that for the foreseeable future, China needs all the tires that Michelin can build.
China has hundreds of tire makers, most of which build just for their immediate vicinity.
But the country has national brands, including Michelin, Bridgestone, Goodyear, Hankook, Kumho, GT and Warrior, a 70-year-old
brand and China's largest native tire maker.
In 2001, Group Michelin took a controlling interest in Warrior when it won approval from the Chinese government to spend $200 million for a 70 percent stake in a joint venture with Shanghai Tire.