By Oliver Hall
Michelin is set to double production in Russia, despite a 50 per cent drop in sales so far this year.
The French tyres manufacturer is reported to be about to increase production capacity of passenger car tyres up to 4 million items per year in the town of Davydovo in the Moscow Region.
Michelin is also considering opening its own workshop to re-tread truck tyres on Soviet soil, according to the Bloomberg report, which will be the first step towards launching truck tyres production for the Russian market.
According to the Association of European Businesses in the Russian Federation, sales of new passenger cars and light commercial vehicles fell 51 per cent year-on-year during the first ten months of 2009.
Eric Faidy, general manager of Michelin Russia, admitted that this downturn has prompted demand for tyres to shrink by as much as 35 per cent, however, he added that signs of stabilisation in the automotive industry point towards a return to growth next year.
Bernard de Vaugerin, Michelin’s finance director for the region, added: “If the recovery is confirmed toward the end of 2010, we can immediately launch major projects to add capacity.”
According to Bloomberg, the additional production will come on stream around 2012.