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How much are tire companies investing in North America?

Michelin announces new plant in Mexico. | © Michelin

How much are tire companies investing in North America?

Michelin has continued its production expansion in North America, this month announcing plans to build a production plant in Mexico for high-end passenger car and light truck tires.

As plans for the 142,000-square-meter, $510 million plant in León, Guanajuato state, get underway, today Traction News takes a look at the investments several of the big tire manufacturers are making in the North American market.

Let’s start with Michelin’s announcement and then take a look at its existing facilities.

Tires to roll off in 2018

Construction of the León facility will begin in the second half of this year and the first tires are expected to come off the production line in late 2018. While the plant will be ramped up gradually, the company expects it to manufacture four to five million tires a year during the initial production phase.

The new plant will bring the company’s production facilities in North America to 21. It currently has 16 in the U.S., three in Canada and one in Mexico. Michelin said the new plant reaffirmed the company’s commitment to “manufacturing its tires as close as possible to the markets in which they are sold.”

“The new plant reflects our ability to take advantage of growth opportunities in the dynamic North American market and to make our manufacturing operations more agile by deploying tire ranges that integrate innovative technology,” said Michelin Group chief executive Jean-Dominique Senard.

Michelin North America says it has invested more than $3.1 billion on manufacturing capacity and infrastructure and other developments since 2011 and currently employs nearly 23,000 people.

“Michelin has invested billions of dollars and created tens of thousands of jobs since arriving in North America more than 40 years ago,” said Michelin North America chairman and president Pete Selleck.

CEO Michelin

Michelin CEO Jean-Dominique Senard and Guanajuato Governor Miguel Marquez. © Michelin

Tire industry commits to North America

As mentioned, Michelin is not the only tire manufacturer that has committed to investment in North America; all the major players have recently completed or are in the process of completing the building and expansion of manufacturing plants in Canada, the U.S. and Mexico. Let’s take a look at what they’re all up to.

Yokohama

Commercial truck tires are rolling off the production line at Yokohama’s manufacturing plant in West Point, Mississippi. The $300 million, one-million-square-foot facility will produce up to one million tires annually and employ 500 workers when running at full capacity.

The company has also completed expansions on its Salem, Virginia, manufacturing plant where it produces ultra-high-performance, high-performance and touring passenger car tires and light truck tires in its 1.2-million-square-foot facility. The company said, however, that future plant expansions could reach “up to four times the original investment and employment levels.

Bridgestone

Bridgestone Americas is expanding its company’s passenger tire manufacturing facility in Wilson, North Carolina, under a five-year, $164 million investment, which started in February 2015. It is also expanding its Canadian passenger and light truck tire manufacturing facility in Joliette, Quebec, as part of another five-year investment that could total upwards of CA$300 million ($250 million).

The overall project, which includes installing new technology, will help increase plant capacity by 3,000 tires per day to bring daily production to 20,000 tires per day by 2023. The plant will help the company meet market demand by producing larger diameter tires for today’s pickup trucks and SUVs, as well as increase productivity and, Bridgestone says “enhance the plant’s global competitive position.”

Goodyear

Goodyear’s new plant in Mexico is set to begin operation in 2017

Goodyear

Goodyear’s new tire factory in San Luis Potosi, Mexico, is expected to begin production in mid-2017, with a capacity of about six million tires per year when complete. When it reaches full production, the factory will employ about 1,000 people. Total capital investment for the project will be approximately $500 million to $550 million.

Goodyear chairman and CEO Richard J. Kramer said the new factory, combined with investments in its existing U.S. and Canadian factories, would enable Goodyear to meet growing market demand for high-value-added (HVA) consumer tires in North America and Latin America. Industry demand for HVA tires in these regions is expected to increase by 10 million tires per year from 2014-19.

Continental

In February Continental announced it had selected a site in Mississippi for a new plant to drive the future growth of its tire business in the North American market. Investment in the manufacturing facility, at a greenfield site near Clinton, will total about $1.4 billion. The plant will employ 2,500 people when it reaches full capacity in the next decade, with production of commercial vehicle tires planned to start by the end of 2019.

“The project in Hinds County, Mississippi, is part of our global growth strategy. In a first step the new plant is especially addressing our commitment to grow our commercial vehicle tire business in North America,” said Continental executive board member for tire business Nikolai Setzer.

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