Michelin's new factory in Shenyang, China officially went into operation on January 26. Michelin has invested around US$ 1.5 billion for building this factory, topping all its investments in China.

The new factory will produce high-end Tyres with an annual output of over 12 million units.

"Tyres produced by the new factory are high-performance and 100 percent environment friendly," said Jean-Dominique Senard, president of Michelin Group.

More broadly, international Tyre companies are bullish about the high-end Tyre market.

Korean Hankook Tyres announced in 2012 an increase in the proportion of sales of large-sized (above 15 inches) Tyres to 60 percent and the segment of UHPT (ultra high pressure technology) Tyres to 26 percent.

Another Korean Tyre producer KUMHO, long focusedon the ordinary Tyre market, announced it would break into the high-end Tyre market as well last year, targeting 15 percent of the Chinese high-end Tyre market. Therefore, KUMHO plans to open 350 new outlets in China this year working from a base of 2,150 existing stores.

Italian Pirelli also announced a focus on the Chinese high-end Tyre market. The company has invested US$ 400 million in China since 2005 when it built its first Chinese factory in Yanzhou and plans to invest another US$ 200 million in the coming two years to raise the production capacity of Tyres for passenger cars.

The Chinese car market is on a smooth decline, but is still gainingagainstthe European market. As a result, several Tyre market segments, especially high-end Tyres with features such as energy conservation, safety, and durability are still widely demanded, Wan Nengyi, president of Michelin (China) Investment Company told a local news daily.

It was estimated that the annual growth rate of the global high-end Tyre market would be 9.6 percent, while the rate in the Asia-Pacific area would reach 17 percent, reported a local news daily.

According to spokesman of Michelin, the car ownership will double in five years and Tyre replacement market will increase at the same pace, if not even faster.