Under the Microscope: We talk to Michelin's national fleet sales manager
21 November 2017
Author: Rachel Boagey
You may know Michelin for its company mascot, Bibendum, colloquially known as the Michelin Man. What you may not know is that the company was founded by two French entrepreneurs, the Michelin brothers, in 1899.
In 1910, 11 years later, the siblings published a ratings guide for hotels and restaurants, widely known as the Michelin Guide, which they would later use to compel
the limited number of drivers at the time to use Michelin tyres to travel to these hotels and restaurants.
Today, a Michelin star is a hallmark of fine-dining quality, and restaurants around the world proudly promote their Michelin-starred status, while the company that hands them out is one of the biggest tyre companies in the world.
"We're much more than just a tyre manufacturer," explains Jonathan Layton, Michelin's head of fleet in the UK and Republic of Ireland. "We have our fingers in multiple pies and one of them is the fleet industry, which makes up 40% of our sales in the UK market."
As well as restaurant ratings and tyres, the company regards itself as an industry educator. "We have an important job, which is educating the fleet industry about things like the importance of premium tyres and the importance of good tyre pressures for fuel efficiency - and knowing this is vital for fleets," Layton says.
"The fleet manager wants happy drivers and a tyre they're not going to complain about."
While fleets generally understand the difference between good and bad-quality tyres and therefore tend to use premium ones, Layton explains that the industry still requires educating so that it can save even more money while enhancing duty of care to drivers.
Most fleets will have a strategy in place regarding tyres and Michelin's job is to influence that policy decision and get involved with it. Layton explains, "The UK tyre market is moving to cheaper tyres, but, luckily, fleet is resisting, and has a strong pull towards premium because they are beginning to understand how important it is. The part of the market to which long-lasting, performance tyres are really useful is becoming more educated, and we're glad to help with this education."
Many trends in fleet are affecting how the company runs its operations, one of which is some fleets getting rid of what Layton describes as the "old-fashioned fleet manager". He says, "With some fleets, the management is all down to HR now, and they're interested in duty of care, safety, efficiency and downtime."
A tyre manufacturer encouraging drivers not to change their tyres may seem odd, but there is a reason for it. "Buying tyres is a distressed purchase," says Layton. "Why would people want to do it more than they needed to?"
Buy cheap, buy twice
Michelin's tyres may be more expensive than most, but according to Layton, even when its tyres are worn right down they will still stop quicker than a new, cheap tyre as "we really invest in engineering and think about the construction, rubber and the design".
One key trend recently is an influx of SUVs into the industry. When asked how this affects Michelin, Layton explains that the relationship between car and tyre manufacturers needs to be very close. "Almost every manufacturer is offering crossover now," he says. "This means our tyres need to be suitable for those cars that are increasing in size."
SUVs are a whole new challenge for Michelin, but one that it - as well as other tyre manufacturers - will be happy to embrace. "SUV has almost become a brand within our range," says Layton. "It's the only part of the car market that is really growing still and therefore Michelin's tyres need to grow accordingly."
This increased size means they're more expensive, too. "SUVs require 17, 18 and 19in tyres," says Layton. But it's not just the size that's increased; it's the interest in premium tyres. "These cars are more expensive so it's even less likely that people, especially fleets, will stick cheap tyres on them. Overall, it's a very good market for us and suits our tyres as the quality of them is good enough to cope."
The company has introduced specific SUV tyres called Cross Climate tyres, which won a BusinessCar Techie award in the Innovation category last year. Described as a "game-changer" by the firm, the benefits for fleets fitting Cross Climate tyres include increased duty of care and improved safety during colder months, in which summer tyres typically underperform.
"There's all this doom and gloom about the economy, but people are investing in cars and maybe that will mean that they invest in tyres too, says Layton.
Although its tyres might be more expensive than competitors, the company insists that fleets that invest in Michelin tyres will save money over time, due to their durability. Its tyres also help to keep fleet drivers happy.
"The fleet manager wants happy drivers and a tyre they're not going to complain about, so it's worth them spending that little more," explains Layton.
Despite the importance of fleet to Michelin, it only dedicates a small budget compared with the commercial market. But its advertising to this audience undoubtedly gets the message out; stocking garages with Michelin tyres for fleets for a start will generate interest from consumers. "We sell a lot of tyres in fleet but it's to a small number of customers," says Layton. In the future, the company aims to attack smaller companies, rather than the big leasing companies it currently concentrates on. "Three million vehicles are sold within outright purchase fleets and that's a market we could tap into in fleet but it's not an easy job," says Layton.
One way of doing so is keeping ahead of the competition. "We have always said we will never introduce a new tyre unless we have improved every single other tyre in our range first and due to this mentality, and the fact that we spend so much time and money in R&D," says Layton,"this means we always seem to be a few years ahead of other brands."
The tyre of the future
Another trend Michelin has to consider is electric cars. With the uncertainty surrounding diesel at the moment, manufacturers, and therefore fleets, are looking into alternative powertrains. "We are looking into the most efficient tyres for electric cars and these happen to be tall and skinny," says Layton. "The reason for this is they have better rolling resistance and will enable the battery to last for longer."
While tyres like this are just a concept at the moment, Layton believes it will potentially have a big impact in the next 20-30 years.
Of course, when the car is electric, tyre noise will be more prominent for the driver. "Noise is an issue for electric cars," he says. "We always focus on acoustics but this is a whole new level. There are two schools of thought in this area, though.
"It's the only noise a driver will hear, so it can't be a horrible noise. At the same time, it's not safe for pedestrians if there's no noise at all."
The next big thing for the world of fleets is the smart tyre, which exists to some degree today. "It replaces some of the need of the driver to know things like pressure and tread depth as it all gets transmitted via telematics," says Layton.
"For fleets, that's wonderful for the duty of care and also for predicting when tyres need to be changed. This will be a big trend in the fleet industry and Michelin is excited to innovate in that area."
Will there ever be a tyre that is puncture-free and never needs to be changed because its tread depth has got too low? Michelin has already launched a concept tyre that may fit the bill. "It is a compound made entirely from recycled materials and has a honeycomb texture, which enables it to be airless," reveals Layton.
The wheel and tyre combination can be 3D printed according to changes in road conditions and weather. "It seems like a
bit of a wacky concept right now, but nobody really knows how close we are to that reality."
In the meantime, Michelin will continue to chase new materials and ideas. "For at least the next few decades, the
way we get around will require a car with round wheels," concludes Layton, "so
tyre manufacturers will be in business for a while yet."