"The total tire market is estimated at some two million units, for cars and utility vehicles. "Third line" or "low cost tires" make up three quarters of this market," CEO for the cars and utility vehicles tire division at Michelin Romania, Cedric Benoit, told Business Standard. By 2011, the percentage of cheap tires will drop to 50-55 percent, as the Romanian car park is renewing, added Benoit. The car tire market will increase by 5-7 percent in five years. "We estimate 2-3 percent growth in Europe. In Romania growth will be faster due to the evolution in new car sales," explained Benoit. Some 255,000 new cars were sold last year, and is expected to rise to 300,000 in 2007, according to Automotive Manufacturers and Importers Association (APIA) representatives.
In 2006, some 1,9 million tires for cars and utility vehicles were sold on the replacement market.
Michelin Romania registered turnover of €260 million in 2006, 30 percent more year-on-year. The group's representatives have set a goal of more than €300 million worth of business and investments of €30 million. Michelin owns three factories in Romania, of which two produce tires (Victoria Floresti and Silvana Zalau, both acquired from Tofan Group in 2001) and a steel tire cord factory (Romsteel Cord Zalau - a Michelin greenfield investment). Michelin investments in Romania amounted to some €180 million by the end of 2006. The year 2007 will be the first with profits for Michelin Romania, say company officials.
Michelin's main competitors in Romania are Italian producer Pirelli and German Continental, both with their own production facilities.
