Why Did Michelin Sell The Camso Off-Road Tire Brand?

French tire maker Michelin, one of the largest players in the industry, manufactures and sells tires in several countries worldwide. While the company is known for selling tires with the Michelin branding, the company also owns several subsidiary tire brands, including the likes of BFGoodrich, Riken, Kormoran, Taurus, and Camso. 

These smaller brands let Michelin compete against products from different market segments, including affordable price, and even specialty tire segments. Many of Michelin's existing sub brands were acquired from other tire makers with the aim of better assimilating into Michelin's global portfolio. An example of such an acquisition was Michelin's 2018 purchase of Camso, a specialty tire maker based in Canada, for $1.45 billion.

Camso is a major player in the off-road and track-focused tires segment. The company's tires are seen on products ranging from construction equipment to farm equipment to snowmobiles. A large company in its own right, Camso boasted sales of over $1 billion, and its operations spanned worldwide, with 26 production facilities of its own, and over 12,000 employees. Its factories were located in countries like Vietnam and Sri Lanka, for lower costs and more proximity to sources of natural rubber.

After being under Michelin's ownership for over six years, Michelin, in 2024, announced that it is selling Camso to Indian tire maker Ceat. The company cites its decision to focus on radial tires and stop production of bias tires as the main reason for the sale. Interestingly, not everything purchased from Camso in 2018 is part of the current sale.

It's important to note that only three components under the aegis of Camso are being sold to Ceat. This includes rights to the usage of the Camso brand, in addition to two manufacturing facilities in Sri Lanka that Camso owns. The rest of the assets purchased from Camso during the 2018 sale remain under Michelin's ownership. This means that Michelin will continue to own and operate the remaining assets it acquired from Camso in the 2018 purchase, including Camso's headquarters and offices in Magog, Canada.

The sale of Camso to Ceat in an all-cash deal valued at about $225 million will also result in Michelin making a complete exit from compact line bias tires and the construction tracks segment. Ceat, on the other hand, will benefit from access to Camso's existing global customer base of more than 40 OEMs and OTR distributors. Under the terms of the sale, Ceat has been granted a license to use the Camso brand for three years, following which it will become a part of Ceat's brand portfolio.

Michelin's decision to sell Camso's bias tire segment is part of the company's Michelin in Motion 2030 sustainable growth strategy, which it has been pursuing for some time. This strategy involves the company focusing its attention on radial technology tires and stopping production of bias tires. In fact, one of Michelin's factories that makes bias tires, located in Olsztyn, Poland, will also stop making these products.