Michelin Group will expand production capacity at its units in China to capitalize on potential growth opportunities, senior executives said, as the French tire and mobility company rides on the country's efforts to cultivate new quality productive forces and undergo a green transformation.

The move has been prompted by the enthusiasm shown by Chinese automakers and technology companies in adopting new technologies, which has opened up numerous opportunities and resulted in a significant increase in the use of electric vehicles, new energy sources and new materials.

In addition to expanding its manufacturing base in Shanghai, Michelin will increase passenger car tire capacity at its factory in Shenyang, Liaoning province, this year to meet soaring market demand.

As China creates more favorable conditions to cultivate new quality productive forces, Matthew Ye, CEO and president of Michelin China and Mongolia, said the key factor behind this is the growth driver related to sustainability.

This has led traditional industries toward high-end, intelligent and green transformations, while fostering the emergence of new industries, demand and collaboration.

New quality productive forces signify a paradigm shift in productivity, primarily propelled by revolutionary technological breakthroughs, innovative allocation of production factors, and profound industrial transformation and upgrading.

"For Michelin, sustainability is also the direction and driving force for our future development," said Ye.

Taking the booming new energy vehicle market as an example, Ye added that Chinese consumers are demanding a better mobility experience, where tires play a critical role.

Apart from innovations in tire technology, and offering consumers experiences that are safer, quieter and ensuring longer mileage, Ye said the company will continue to invest in factories in China to embrace market and consumer demands.

For instance, the Clermont-Ferrand, France-headquartered group's ongoing expansion project in Shanghai, begun in November 2023, aims to create a green and intelligent future factory with an annual increase in tire production capacity of 1 million units.

Ye said the company will introduce more businesses beyond tires to China, such as high-performance adhesives, and high-end engineering fabrics and films. These segments are designed to cater to highly technical segments such as industrial devices, electric vehicles, sports and construction.

Dismissing speculation that China's economy is peaking, Ye said it will continue to maintain a steady momentum this year, and that the vitality of the economy can be further activated, especially with the recovery of consumer confidence, acceleration of industrial upgrading, and deepening of opening-up.

That sentiment is in line with the latest data.

Data released by the National Bureau of Statistics and the General Administration of Customs show that China's industrial output in January and February grew 7 percent year-on-year after a 6.8 percent rise in December, while the country's foreign trade reached a record high of 6.61 trillion yuan ($915.5 billion) during the January-February period, up nearly 9 percent year-on-year, signaling a strong start to 2024.

Speaking at a session of the China Development Forum 2024 held in Beijing late last month, Florent Menegaux, CEO of Michelin Group, said that in a challenging global context, the company continues to see opportunities and will always innovate to find new solutions.

"We are very much committed and confident in the future of our activities in China," said Menegaux.

Supported by 132,200 employees and 121 production facilities across the world, Michelin's sales grew by 2 percent year-on-year to 28.34 billion euros ($30.61 billion) in 2023, according to the group's financial report.

With its substantial market demand and growth prospects in sectors such as new energy, digital transformation and intelligent manufacturing, along with comprehensive industrial support and integration advantages, China will remain a preferred destination for global investors, said Cui Fan, a professor at the University of International Business and Economics in Beijing.

To foster a more favorable business environment, the General Office of the State Council, China's Cabinet, issued an action plan in mid-March to steadily promote high-standard opening-up and make greater efforts to attract and utilize foreign investment.