The anticipation of cooperation that year was now a crisis that broke up.

A few days ago, reporters got news that Shanghai Michelin Warrior Tire Co., after more than 6 years of unhappy cooperation, may split up this year.

According to informed sources, in recent years, Michelin has continued to cut prices for certain products, in order to prevent the loss of market share after the loss of the brand. In 2003, Michelin transformed its Michelin plant in Shenyang into a wholly-owned company and began to shift its focus to the Shenyang plant. In the face of a seven-year return brand, the Michelin has already prepared for his own retreat.

Michelin's price drop suffers

Looking at Michelin's global strategy, using different brands and different prices to provide differentiated products to different consumers. Wherever he went, he was basically Michelin, Bailuchi and a well-known local brand.

Michelin's mid- to low-end tire market in China relied mainly on the back-to-back brand of a joint venture with Shanghai Tyre & Rubber Company in 2001. The Michelin brand is positioned in the high-end market. Michelin wanted to expand its market share in China by adopting a multi-brand strategy through complementarity with Pullman.

According to industry sources, although in recent years Michelin has used a relatively small amount of power to build a back-to-back brand compared to the Michelin brand, but in Michelin's Chinese strategy, the pull-back is still an important piece.

On January 19, the person in charge of a Michelin franchise store in Beijing Xijiao Auto Parts City told reporters that since last year, the price reduction of Michelin tires has exceeded 30%. After the price reduction in December last year, Michelin tires have fallen from more than 450 yuan at the end of the previous year to about 330 yuan. The price of pullback tires has almost no price cuts, and there has been an increase, resulting in a smaller and smaller price difference between the two. He said to the separatist family: "This shows that Michelin intends to attack the low-end market and make up for the loss of the lost brand."

In another tire retail store, the reporter learned that for the Jetta model 185/6014, for example, the retail price of Michelin was 328 yuan and the pull-back was 300 yuan, which was less than 30 yuan.

“The price reduction of Michelin tires has a great impact on the entire tire industry. I personally believe that the damage to the back force is even greater.” Another owner of a tire dealer who has operated for nearly 10 years told reporters. According to his observations, Michelin tires may also cut prices.

In this regard, some analysts pointed out that this time the price cut makes the original joint venture company that is unhappy with the cooperation, the future cooperation is bound to be more difficult.

Loss-making joint venture company

In April 2001, Michelin teamed up with Shanghai Tire & Rubber (Group) Co., Ltd. to jointly establish Shanghai Michelin Warrior Tire Co., Ltd. (SMW) with a total investment of US$200 million and Michelin’s share of 70%. SMW continued to produce back-car branded sedans and light-duty radial tires, and began production of Michelin-branded tires at the end of 2002.

In the same year, Michelin moved its headquarters in China from Beijing to Shanghai and set up an R&D center in Shanghai.

Since the establishment of the joint venture company, there has been controversy over Michelin’s management of the new company. It has been reported that Michelin was determined to transplant his corporate culture to Shanghai Michelin from the very beginning, so that it can truly integrate into the Michelin family. However, during the process of integration, internal communication between Chinese and foreign parties has encountered difficulties and cultural conflicts have continued.

The cooperation with Michelin, the world’s largest car tire manufacturer, once filled expectations, but since the joint venture, Shanghai Michelin has been unable to make profits since its establishment in 2001.

The public report shows that in 2001, Shanghai's Michelin was able to lose 126 million yuan in return strength, with a loss of 135 million yuan in 2002, a loss of about 148 million yuan in 2003, a loss of 125 million yuan in 2004, a loss of 54.995 million yuan in 2005, and a loss of 75.356 million yuan in 2006.

The sustained losses of the joint ventures have made the disagreements between the Chinese and foreign parties on the operating mechanism more serious. So far, the cooperation between the two sides has not been very pleasant because of many differences in the management system and personnel arrangements.

Although the joint venture company suffered huge losses, the development of Michelin in China in recent years was booming, and it was in great contrast with the situation of the joint venture company.

Double money to take back the brand

The hot tires in the car tire market and the consecutive losses of the joint venture companies also caused the Shuangqin Tire Company (backyard brand ownership unit) to initiate the recovery of the Huili brand. According to informed sources, the 7-year contract will expire in April this year, when double money will be recovered back to the force brand.

The reporter called Shuangqian Tire Co., Ltd. and the company did not directly deny the matter. The person in charge of the Securities Affairs Office told the reporter: “The specific issues are inconvenient to disclose. Whether to take back the LiLi brand should be based on the announcement issued by the company.”

In response, Shi Jie, the high-level media commissioner of Michelin (China) Investment Co., Ltd.'s Beijing office, said to the newspaper: "There is no such thing."

According to Shanghai local media sources who are familiar with double-money tires, the idea of ​​double-money trying to recover the back-to-power brand has been a long time. Now the two sides are negotiating.

The back force was born in 1947 and is a domestic brand name product. Regarding the reporter’s question of “What has a double-winning tire company acquired since the joint venture was more than six years old?”, an insider of the Double Money Tire was silent. The period of six or seven years did not save the glory of the back-to-back brand, and some of the lost Chinese people could only eagerly expect the return of the brand.

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