Page 16 - CTB N7 - 2014-03

INTERVIEW
Guy Heywood
Interview: Guy Heywood - Michelin
According to Guy Heywood, Michelin’s Commercial Director - Truck for the UK and Ireland, the French-owned tyre manufacturer is very bullish about its prospects for growth in a recovering economy and is looking to beat its sales target both this year and next. Fresh from his exploits in climbing
our range being renewed. We now have a brand new product portfolio with products such as X Line Energy, X Works, X Multiway 3D and the new X Multi-T trailer tyre.
The impact of the new products can be seen in the growth in market share which we are
GH
15 years ago the tyre market was very cost oriented. Gradually it moved over to the PPK argument, but today even that is no longer enough. Today we are talking about Total Cost of Ownership (TCO). Fleets no longer just want better mileage – they want fuel savings, reduced CO2 emissions, better stopping distances and reduced complexity of business.
It has proven difficult to sell tyre related fuel savings of 2-3% on their own, especially when these savings often depend on how the fleet is managed. However, if you can include other factors into your offering and can provide fuel savings of 6-9% - then fleets start to become more interested.
We realised if we could manage all of a fleet’s mobility - not just fuel savings and look also at aspects such as telematics and driver training, then we could provide a total mobility solution that delivers real value to our customers. Effifuel is part of our move to embrace TCO. Michelin solutions operates as a separate company and is not about selling tyres. It is a recognition that the industry is changing and that in the future we will be selling ‘value orientated’ mobility solutions.
Effifuel is a bundled solution, whereby we do an assessment of the fleet’s tyres, its telematics and its drivers. It provides a major benefit because it provides a guaranteed saving, a move to premium tyres and business simplification. We are ambitious that this part of the business will show major growth.
We strongly believe that TCO will be the next revolution in the tyre industry. Nowadays, most haulage companies understand the PPK argument, but there’s more to it than that. Optimum fleet management goes beyond mileage and fuel. At the moment TCO is only being looked at by the largest fleets, but if we can get to the point where the medium sector understands it too, then we will have made great progress.
CTB
How important is the tyre labelling legislation and what advantages does it offer the tyre industry?
GH
Michelin supports tyre labelling legislation because of the fact that a cost-based market still exists. The haulage industry generally does understand that tyres are not all the same, so in general labelling is a positive development. There are still lots of questions to be answered, though, such as the difference in fuel saving between an A and C grading. We believe this to be as much as £8,500 per year for a tractor unit and trailer. Another major issue is the fact that measurements are taken when the tyres are new. What happens when tyres are part worn and what impact does tyre longevity have on overall fuel consumption, bearing in mind that generally a tyre is at its most fuel efficient when it is fully worn?
It is relatively easy to provide an excellent fuel efficiency rating if you compromise on mileage, but much more difficult to combine mileage and fuel efficiency. If you buy a cheap new tyre, you will have to replace it before the Michelin, which will still be running, and at a more fuel- efficient level. If the lifetime fuel rating of tyres were measured, this would show a massive difference in overall fuel savings between tyres which are currently rated the same. This is something that is not fully understood by the sector.
This is also very much an issue with wet grip and stopping distances which vary significantly when the tyres wear. An A rated tyre when new can quickly lose stopping performance as it wears, a point demonstrated in several testing videos accessible on the Michelin YouTube channel.
There are other questions too. There is the danger of manufacturers manufacturing specifically for the label by ignoring mileage and other performance characteristics not currently included on the label, and there are issues with monitoring the testing regime.
Overall, therefore, the label is useful, but it is not a panacea. We would not recommend customers make their tyre choice on the strength of the label alone.
CTB
What are the priority market sectors for Michelin at the moment? Where is the company looking to improve
Mount Kilimanjaro with his family for the international development charity Transaid, we managed to catch up with Heywood at the start of September to discuss Michelin’s plans for the coming year. Subjects for discussion included the company’s newly redeveloped product range for the commercial sector, the recent launch of Michelin’s new breakdown service and the significant investments that have been made in the retreading factory at Stoke-on- Trent. We also talked about plans to increase sales in the Tier 2 sector as well as a strategy aimed at improving the company’s contacts with smaller fleets.
Commercial Tyre Business
Michelin has introduced a number of important new tyre products for the commercial vehicle sector over the course of the last two years. Could you please outline the aims behind this product development process, the benefits of the new products and the impact they have had on the market?
Guy Heywood
We have conducted an unprecedented product development process over the period you mention, with 50% of
achieving. The market is up 9% on a year to date basis but our sales are up 16%. This is largely due to our new ranges of tyres, which are significantly better than their predecessors. The X MultiWay 3D tyre, for example, provides a 1⁄2 litre per 100 km fuel saving and we are seeing 15-30% better mileage than our previous generation of products.
The challenge, of course, is to prove that they’re better, and that is a key reason why we have such a large team of account managers and support staff.
Our aim is to demonstrate these savings to our customer and the transport industry in general. It’s about encouraging users to unlock the value in the products they have bought by making the best use of retreading and regrooving options and by backing this up with technical advice and service. In this way we are aiming to maintain the legitimacy of premium products.
CTB
How important to the company’s overall strategy are the activities of the Michelin solutions subsidiary and programmes like Effifuel?
16 Commercial Tyre Business