French tyre manufacturer Michelin has switched places with Bridgestone to become 2018’s most valuable tyre brand, according to Brand Finance.
The French tyre maker saw 30 percent brand value growth to $7.9 billion (Rs 49,904 crore), overtaking Bridgestone (-6% to $7 billion or Rs 44,219 crore). The Brand Finance report claims that Michelin is not just the most valued tyre brand but also the strongest, as per the Brand Strength Index (BSI) score which sees it lead the sector with 86.9 (+6%) out of 100, helping the brand rating improve a notch to AAA, making it the only tyre brand with a clear triple A rating.
The company was helped by its sustainability and technology initiatives that helped strengthen the brand. This includes its concept for a 3D-printed tyre that can be adapted to road conditions and never needs replacing,
which was showcased last year. Michelin tyres performed well in motorsport, winning at the Le Mans 24 Hours race and being used in Formula E, which is becoming a desirable place to showcase technology for leading car manufacturers.
“A strong brand is about more than marketing. Michelin has started direct sales of tyres to customers through retail outlets and the internet, a move that helps build a brand relationship and allows the company to collect valuable data. It is also widening the sub-brand portfolio, allowing it to sell price-competitive tyres and premium ones without the two eating into each other’s market shares,” said Alex Haigh, director, Brand Finance.
Weak domestic market impacts Japanese brands
The globally competitive markets have witnessed increasing pressure on leading tyre makers to establish new strategies and products along with explore new markets for growth. The world’s largest tyre company by market capitalisation, Bridgestone, which dropped to second place was not the only Japanese brand to lose value, with Yokohama down 18 percent to $0.8 billion (Rs 5,053 crore) and Sumitomo Rubber Industries down 62 percent to $0.6 billion (Rs 3,790 crore).
The Brand Finance report states that the weak domestic market affected all the three Japanese tyre makers, while value gains from stronger sales growth in North America, Europe, and Asia were partially offset by a weaker yen.
Chinese tyres gain traction
While the Japanese brands witnessed a drop in their value, Chinese companies have appeared as successful challengers to the established brands in the tyre industry.
Although, apart from Maxxis, in the eighth spot, Chinese brands are still outside the top 10, the three largest – Linglong Tire, Sailun Jinyu and Changchun Faway – are making their mark and, given their current brand value growth, should make a successful entrance to the Top 10 as early as next year.