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Michelin is Gradually Moving TIER 2 Passenger Car Tire Production to Indonesia
Michelin increased production volume of BFGoodrich and Uniroyal passenger car tires. The increase in production volume of the two tire brands is expected to increase the contribution of exports to this sector. President Director of Michelin Indonesia, Steven Vette, said that this step is in line with Michelin's strategic plan in Indonesia after the acquisition of PT. Multistrada Arah Sarana in 2019. “After the acquisition, Michelin changed its factory facilities from TIER 3 tire production to TIER 2 through the transfer of technology owned by Michelin. Then we gradually moved the production center for TIER 2 passenger car tires from several factories in Asian and European countries to Indonesia," said Steven in a press release, Tuesday, August 16, 2022.
Through this move, Indonesia has become one of the three main Michelin manufacturing hubs in the world for the production of TIER 2 passenger car tires (BFGoodrich and Uniroyal). To date, the entire production of BFGoodrich and Uniroyal tires from factories in Indonesia is exported, mainly to countries in North America, Europe and Asia, and contributes to Michelin's main export revenue in Indonesia.
Michelin gradually began to reduce exports of Achilles brand passenger car tires in 2020. Instead, BFGoodrich and Uniroyal brand passenger car tires began to be produced and exported in the same year with an initial total volume of 1.5 million tires. Production and exports of BFGoodrich and Uniroyal increased by more than 200 percent to more than 4.6 million tires in 2021 with an export value of more than USD 300 Million.
This year, Michelin targets an increase in production and exports of BFGoodrich and Uniroyal tires by 50 percent compared to 2021 with an export value of USD 500 million. Michelin will continue to increase the production and export of passenger car tires for both brands by an average of 35 percent annually in 2023 and the following years. With this increase, it is expected that the total production of Michelin passenger car tires will reach more than 11 million units or close to 100 percent of the utilization rate with an export value of close to USD600 million. Meanwhile, Michelin will continue to produce and sell Achilles brand passenger car tires for the domestic market.
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