#360business: Michelin's vast R&D investment

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Michelin is one of the most recognisable motorsport companies in the world.

Tyres are what connect any vehicle to the ground. Yet, when it comes to the everyday driver, their importance is often overlooked.

It’s quite the opposite in motorsport, though. For them, running on poor quality tyres is the equivalent of a marathon runner wearing flip flops for a race – you just don’t do it.

There’s one manufacturer that has become synonymous with motorsport since its inception and has become widely appreciated as one of the best brands on the market.

Michelin celebrates its 125-year anniversary this year and though the French manufacturer has had its ups and downs in motorsport, its success on the track has enabled it to become a household name on the street.

Key to that success has been the significant investment and dedication to research and development, which all starts on the track.

Michelin spent in excess of €650m (Dh2,670m) in bringing their latest technologies to life. Only Bridgestone spent more on R&D last year.

“Motorsport has been woven into the DNA of Michelin,” says Pierre Azemat, Michelin’s product marketing manager. “R&D is such a key part of our success and it’s what we’ve been doing since our inception way back in late 1800s. Given that background, motorsport is just a natural extension for us because for a company that is working so closely with vehicles, the track is a perfect laboratory to do our testing.”

Azemat says Michelin’s consumers have benefited from the company’s involvement with the sport.

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“By participating in motorsport, we get access to this extreme laboratory where the racer, the car manufacturer and the tyre manufacturer are together to win and to find the best mobility for our customers,” he adds.

“There’s some really obvious examples where this method of track to street has ended up in the product that we sell to consumers for everyday use.

“There are elements of the tread compound that comes from the tyres used at Le Mans that are being used in our street products.”

In terms of numbers, Michelin are unrivalled. No other tyre manufacturer has won more titles than them with 24 Le Mans victories – 18 consecutive – 46 World Rally Championships, 26 MotoGP titles and six drivers titles in Formula One to name but a few.

Invariably, talk of tyres leads to discussion about the behemoth of motorsport that is the F1. It’s a series that has left an indelible mark on Michelin, both good and bad, but has proven to be a lucrative partnership in the past. 

Not only is it the ideal laboratory to test out new technologies, but the brand awareness opportunities are exponential.

A study revealed that during the 89 F1 broadcasts over a five-year period, team sponsors and in particular tyres, received a total of nearly 190 hours of exposure and that’s said to value in the region of $6bn (Dh22b). An average viewership of 300million per race and 18 different markets televising the series means the opportunity to advertise the brand is enormous. 

That can, though, be a double-edged sword as Michelin found out in 2005 with the controversial United States Grand Prix and problems with their tyres. 

It led to the end of their partnership with F1 but that nine-year hiatus could soon come to an end.

Since 2007 F1 has had a sole supplier, reasoning that competition between manufacturers proved costly both financially and organisationally given the time needed for testing. 

Michelin have bid to take over the reigns from the current supplier Pirelli for the 2017-2019 seasons, but it’s a proposition that brings many challenges.

Motorsport director Pascal Couasnon wants to see low-profile and wider 18-inch tyres – which it currently supplies to Formual E – rather than the current 13-inch versions.

“In making a proposal we are trying to change the situation a little. We believe the image of tyres in Formula One is not what we would like to do, or makes sense,” Couasnon told Autosport earlier this month. “The tyre used as an object you throw away after a few laps, or whatever, is not really something that is good for the tyre industry.”

Should Michelin win over F1 supremo Bernie Ecclestone, Azemat is convinced his company will be a huge success once again.

“Formula 1 has a tremendous following,” he says.

“It’s great to get out there and show the strength of the Michelin brand on such a vehicle.

“The difficulty for us last time is that we wanted to compete with other tyre manufacturers and if we’re not doing that, we wanted to be a platform to improve the overall performance and safety of the event. That’s why what we’re proposing now is what we think is a much better solution. 

“The biggest difficulties in F1 to overcome is the length of the races, the weight and power of the cars and the complex logistics to be able to support a global event.

“But designing the tyres to achieve the performance they want, we have done that superbly historically and we have the trophies to prove that.

“It’s been a single manufacturer for so long, teams and drivers have gotten so used to the products they’ve been using so we would need to find a new level of comfort with them but I’m sure we can do it. There’s no reason for me to doubt we wouldn’t be comfortably atop the podium again.”

A man who has tasted plenty of podium success in the past is Scott Mansell, who in his role as the Lotus F1 team’s race briefer and instructor, knows a good tyre.

An F1 driver is said to be able to detect the loss of less than a tenth lb/sq of tyre pressure so every bit of quality counts and Mansell is convinced there are few who can compete with Michelin.

“Tyres are the only thing that connect the car to the surface so of course they’re incredibly important,” he says.

“Drivers are understandably very upset when it comes to tyre failures for the simple reason that they are very dangerous, but Michelin are renowned for their endurance.

“As a driver you’re looking for the consistency of the performance and they give you that because you want as much grip for as long as possible so you can continue to hit the corners as fast as possible.”

But Formula 1 is not the be-all and end-all for Michelin.

With an involvement in just about every motorsport on the calendar, their relationship has become like going to the gym. The constant development allows their products to become faster and stronger and it has enabled them to consistently deliver world-class tyres.

Only Bridgestone beat them for production output with $24.4bn worth of tyres sold last year.

Having opened up a gap with the competitors below, the challenge now is to rein in the one above.

“I think going forward, we’re looking at ways of improving how long the tyres can last,” Azemat assesses.

“From a grassroots level it means that it’s more affordable to race and for the better-funded teams it means they’re more environmentally friendly, which is a big part of what we do.

“You look at Formula E and it’s about 200 tyres needed for the full race weekend, but others, which are little bit more open in terms of the tyre policy, there’s a significant increase. So being able to decrease the need for such a volume of tyres will be challenge but there are always areas for improvement.”

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