The Hungarian Tire Association (HTA) was founded in 2011 by seven international tyre manufacturers with manufacturing capacity and representation in Hungary. In our series, we interview the leaders of these companies on current issues. This time, we spoke to the Managing Director of Michelin Hungária Kft. about the future of four-season tyres, Chinese competition and their work in Hungary.
The past few years have taken their toll on the sector: COVID, raw material problems, inflation. How have you reacted?
We take decisions based on our ‘everything is sustainable’ approach announced a few years ago. This is about balancing people’s well-being, environmental protection and economic performance. This approach has served as a good line guide during Covid. Looking back on the most difficult period of the pandemic, our most important steps were to ensure the health of our employees. Our teams have made extraordinary and successful efforts to overcome logistical and procurement difficulties. As a result of all this, our Hungarian units have continuously maintained their operability, and we have been able to serve our customers continuously. Naturally, demand for our products also decreased temporarily, which had an impact on our work schedule, and during this period we financially supported our colleagues in the most difficult situations. I am proud of the cooperation, professionalism and determination that our teams showed during the pandemic. In the past year and a half, we have diversified our raw material sources, and today we have a higher proportion of suppliers from the Far East or Europe than before. Thanks to this, we were able to ensure the supply of raw materials to our factory in Nyíregyháza without any interruptions. Of course, we are constantly working on optimizing our raw material procurement. Another good example of our ‘everything is sustainable’ approach is how we have dealt with the energy crisis: we have converted our previous gas-based vulcanisation and heating systems to electric-based, allowing us to use fully renewable sources and thus reducing our environmental footprint, increasing energy efficiency (both per unit consumption and per unit cost) and improving working conditions for many job posts.
One side effect of this inflation is that Chinese manufacturers flood the markets with cheap products. Do you think big manufacturers should be afraid of them? What criteria would you recommend consumers to use to make their choices?
Globally, we are seeing an increase in market share of the budget sector. However, even in this segment, awareness of European-made budget brands, product quality and services may justify higher prices. And with all the steps we’ve talked about with inflation, we can keep the price difference within a range acceptable to users. Consumers should be aware that only a few manufacturers are able to improve or even maintain all the performance of tyres at the same time, and in many cases a low price is achieved by reducing one of the performances. Therefore, before buying, it is worth finding out about the consumption (rolling resistance) or braking properties of tyres. These two parameters are clearly visible on the product label. A very important additional parameter for the buyer is the lifetime of a tyre (or mileage). It is not visible on European labels, but can be found through independent tests. We are convinced that the Michelin Total Performance logo on the sidewall of our tyres shows that thanks to our high technical know-how, we can balance all tyre performance parameters at the same time. When it comes to regulating tyre performance, we welcome the new EU rules expected in the coming years: the R117.4 standard for rolling resistance or the inclusion of tyre wear in the Euro7 standard. By ensuring that only products of adequate quality can be placed on the market, these actions are directly in the interests of consumers by reducing consumption and protecting our environment. One of the consequences of stricter technical requirements may be the displacement of very cheap, low-performing products.
In Auto Bild’s all-season tyre test, CrossClimate2 scored the highest score, beating out 100 competitors. Does this mean that the rise of all-season tyres is unstoppable? What is Michelin’s strategy in this area?
The all-season tyre market is very dynamic, for several reasons. On the one hand, winters in Europe have been mild in recent years. On the other hand, seasonal tyre changes and the elimination of storage of the transmission set are convenient and economical solutions for consumers. We believe that every consumer should choose tyres according to their driving habits – winter or studded tyres are needed in some areas, even in Europe, while summer tyres are the best solution in others. That is why our strategy is to develop and offer products for every user and every usage condition.
What tyre do you use? (Whether on a company car or a private car)
I myself have been using Michelin CrossClimate tyres for years, currently I am using CrossClimate 2.
In addition to tyres, Michelin is also present in several other fields in Hungary. What can we know about these activities?
The basic pillar of Michelin’s strategy is to strengthen our “around tyres” and “beyond tyres” activities in addition to tyre production and trade. Our goal is that by 2030, 20-30% of our sales should come from these two areas. A good example of “around tyres” activity in Hungary is our “Services and Solutions” team, which provides complex tire services for transport fleets. One of our latest innovations in this area is the artificial intelligence system that evaluates the impression image of the tyres on vehicles and provides a complex analysis of their condition and expected mileage. A well-known element of the “beyond tyres” area is the Michelin restaurant guide. We have been publishing the red guide about restaurants in Budapest for years, but this year we presented a guide covering the whole country for the second time – we think that this is a worthy tribute to the best representatives of Hungarian gastronomy. In addition, in order to raise awareness of today’s pressing environmental challenges, several of our colleagues volunteer to promote the internationally known “Climate Fresco” program. Our colleagues are the first Hungarian animators, and they also initiated the adaptation of the method in Hungarian. Currently, they are enthusiastically planning the first workshops for schools, municipal organizations and affiliates.
Every year, tyre manufacturers are adding new models to the market, and experts say the tyres are getting better. What is the state of the industry, compared to ten years ago? What is the main direction of R+D? What tyres will we be driving with ten years from now?
At Michelin, we want to offer cutting-edge products that serve the real needs of drivers. We believe that the mobility of the future must be ever safer, more accessible, more efficient and more environmentally friendly. These four goals guide our product and service development. The fact that we spend around €650 million a year on research and development, that 6,000 of our colleagues work on this field and that we have 10,700 active patents worldwide is perhaps a testament to our commitment to innovation. We have made huge progress in many areas and research in these areas is still intensive, so I expect further major changes and breakthroughs: improving rolling resistance, reducing the weight of tyres, developing tyres with ever larger diameters and smaller sidewalls. At present, I see three directions appearing very markedly in addition to these. On the one hand, in electric cars, tyres must support more weight and torque. On the other hand, more and more recyclable materials are appearing in tyre production. At Michelin, our goal is to produce 100% of our tyres from either bio-sourced, renewable or recyclable materials by 2050. The third direction is the data connection of the tires to the vehicle. The prospects in all three areas are dizzying. What will the future bring? In 10 years’ time, will tyres look like they do today? Maybe not. After all, we have already presented the VISION concept with renewable tread, which merges rims and airless tyres. The VISION is not yet available on the market, but our Uptis tyres, which are also completely restructured, are. But I’m absolutely sure that whatever engine our cars have, whoever or whatever drives them, whether they’ll be able to take to the skies or not, they’ll always have tyres on them.