[Aditya]

Michelin has announced that it is making its passenger car & light truck tyres available on equated monthly instalments (EMI) at select Michelin Priority Partner (MPP) and Tyreplus stores in India. The company has worked with partners to offer 100 % finance, on all major credit cards, on purchases of Rs. 5,000 and above.



With this step, Michelin aims to offer an easy buying option to its customers.

After applying for digital warranty registration at a Michelin authorized dealership, customers can avail the EMI facility on their credit cards at no extra cost and with zero documentation.

Customers will have a choice of availing 3 to 6 monthly instalments at no extra cost or added interest.

[saket77]

That is innovative.
However, I am not sure if that would help boost their sales given the target sect of customers of Michelin (positioned as a premium brand) which is mostly the higher middle class or the upper class. I don't think that it is going to generate a lot of volume, but buying them might have gotten easier.

This kind of strategy might help regular brands a lot more.

Regards.

[funkykar]

Awesome! My Linea is due for tyres replacement. With the rising tyre prices and Michelins being premium price, this is such a nice option. Will seriously consider this

[WasavaTyres]

This has been there with Goodyear and Yokohama for about six months now. It is not actually a tyre company initiative. It's promoted by a company called Pine labs from Gurgaon. The merchant has to have a EDC treminal ( credit card swipe machine ) from pine labs which in turn has tied up with credit card issuing companies to enable this facility.
The tyre companies prefer to position it at their branded outlets like Bridgestone select, Yokohama Club Network, Goodyear BRO , Michelin Tyreplus to increase footfalls.

[audioholic]

How is this different from the EMI option in the credit card? I recently purchased tyres through credit card and after three days I received a call stating that I could convert the purchase into an installment at no extra interest or processing fee. However I was not interested in the same. This seems to be a similar scheme, as I dont see anything exclusive?

[shankar.balan]

Basically Michelin will pay the subvention charges to the bank.
The consumer will benefit and there will be a blip in sales for sure.
6-7 years ago, we created a similar program for Apparel on EMI, to induce newer, more youthful consumers to try the brand and hopefully create loyalty and an opportunity to engage with them.
We saw some amazing results with that program - it was far more elegant that direct discount and cash back and all the rest of the recent gimmicks. And it genuinely had a value prop to the consumers because it was an "enabling program" which allowed them to experience a brand that they otherwise may not have bought.
And yes, the average ticket sizes went up significantly too, on account of that program.

[Fortuner71]

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[GTO]

Smart move. Considering their premium positioning, definitely makes Michelin more attainable for the masses.

Just a note to add: I'm sure that the full purchase amount will be blocked on your credit card.

Originally Posted by audioholic

How is this different from the EMI option in the credit card?

This is interest-free. Credit card companies will charge interest for the purchases they convert to EMIs. The call you received however, could be related to Pine labs, as shared by Wasava Tyres.

[GTO]

Well, apparently, all isn't as rosy as it seemed initially. Thanks to a Team-BHP Fan for sharing these details (he prefers to remain anonymous):

Pricing involves 3 prices:

1. Net Billing Price (tyre purchase price)

2. RCP or Recommended Counter Price

3. Actual selling price (after discounts)

As the words say, the Net Billing Price is the price at which the dealer buys the tyres from Michelin India.

To increase the profitability of dealers, Michelin is forcing their dealers to sell at RCP. Usually RCP is higher than the actual selling price. The actual selling price is what the customer gets after bargaining and negotiating.

Most dealers don't care about the RCP and sell at very low margins to get customers and clear stock. So, Michelin has introduced this EMI scheme to push customers to buy on EMI.

The condition for this EMI is that the dealer has to sell at the RCP. So, no negotiation. The dealer will not be allowed to sell at a lower than RCP price while giving on EMI. If he does, it is recorded in Michelin's software and the dealer loses some incentives.

This EMI scheme is no big deal. It is actually a loss for the customer. If he is ready to pay cash, or pay through card immediately, he can bargain a much better rate.

[iliketurtles]

I happened to call Michelin's customer care helpline today to try and figure out what this was all about, and the good folks on the other end of the line professed their ignorance about this. Good to pop in here and find out it's much ado about nothing. I guess I'll just move along, nothing to see here.

[mithun]

The offer is still available: http://www.michelin.in/IN/en/promotions.html