Two archrivals in the global tire industry are joining to develop next-generation technology for run-flat tires, a safety innovation that has received a cool response from the market so far.
Goodyear Tire & Rubber Co. of Akron, Ohio, USA, and the Michelin Group of France announced they would form a joint venture to introduce new run-flat choices based on existing product lines. The venture would be based in the Netherlands.
Company leaders expect the partnership to dramatically accelerate the introduction of advanced run-flat systems to automakers and customers.
Goodyear CEO Sam Gibara said run-flat acceptance has been hindered by the lack of a global standard. But the joint venture aims to change that, winning over customers while preserving competition between two companies accustomed to 'beating each other's brains out for new business,' Gibara said.
The collaboration has potential, observers said. 'You're now going to have the largest tire companies in the world providing the same run-flat technology, which will make it much more attractive for the automakers to put it on as original equipment,' said Wendy Beale Needham, an analyst with Donaldson, Lufkin and Jenrette in New York. 'And if they put it on as original equipment, there will be replacement demand for it.'
The companies will split development costs, Michelin CEO Edouard Michelin said. The CEOs declined to discuss sales or profitability of the new tires.
The companies have chosen Michelin's Pax integrated tire-wheel system as the platform to bring run-flat technology to new vehicles. Pax, which requires a special wheel, has been fitted on several concept cars.
'The Pax system can be manufactured on existing equipment,' said Gibara. 'It needs fine tuning but no significant new investment.'
The venture includes agreements to use each other's run-flat patents - Michelin's Pax and Goodyear's EMT (extended mobility technology).
Pirelli, which signed a separate technical agreement with Michelin in 1999 to share Pax technology, is not included in the joint venture.
'Pax systems will start with upper-range models, but in 2003-2004 the implementation will speed up dramatically,' said Gibara.
A Renault spokesman said the company would introduce the Pax system in 2001 on an existing model.