The recent price cuts on Michelin-branded tires have sparked concerns within the joint venture, particularly affecting the Warrior brand. According to reports, Shanghai Michelin Warrior Tire Co., Ltd., a joint venture between French tire giant Michelin and China's Shanghai Tire & Rubber Co., has been slashing prices on its Michelin tires, which are now encroaching on the low-end market that was once dominated by the Warrior brand. This move has raised questions about the stability of the partnership. Sources close to the company suggest that the price reduction is not just a market strategy but also reflects growing tensions between the two partners. The dispute has led to speculation about a potential split, though no official confirmation has been made yet. Michelin, which holds 70% of the shares in the joint venture, has maintained a multi-brand strategy in China, including Michelin, Warrior, and Bailu Chi. According to Chen Qihua from Michelin China, the Pullback brand remains a key asset for the group. The company continues to adjust pricing based on market conditions, customer demand, and raw material costs. Despite this, the joint venture has struggled with profitability over the years. In 2004, 2005, and 2006, it reported losses totaling hundreds of millions of yuan. These financial challenges, combined with management disputes, have strained the relationship between the Chinese and French sides. Analysts believe that the price cuts signal a shift in Michelin’s strategy, potentially preparing for a possible breakup. If the joint venture dissolves, Michelin could maintain its high-end market position while expanding into the low-end segment, which is currently dominated by domestic brands. Meanwhile, foreign tire companies are increasingly moving away from joint ventures with local manufacturers. For example, Pirelli recently opened a new factory in Shandong, jointly owned with Galaxy Group, with Pirelli holding 75% of the shares. This move reflects a broader trend among global tire giants to establish sole ownership or more controlled partnerships. Michelin itself has gone through similar transitions, converting several joint ventures into wholly-owned subsidiaries. In the case of Shanghai Michelin Warrior, the company attempted to dilute the Chinese shareholders’ equity through capital increases. As multinational firms consolidate control, domestic tire brands face increasing pressure. According to industry data, Chinese tire companies collectively produce only 400,000 units per year on average, with just a few large players exceeding 1 million units annually. Domestic brands like Wanli, Triangle, and Linglong account for less than 25% of the market, with the rest dominated by foreign competitors. With the ongoing competition, the future of joint ventures in China remains uncertain. As foreign companies continue to seek greater control, the challenge for domestic players grows steeper.

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