The archive · Business Models · Strategic decision · 2000–2010
Michelin Fleet Solutions: stop selling tires, sell the kilometers instead
In 2000 Michelin launched Fleet Solutions: fleets pay per kilometer while Michelin owns and maintains the tires — selling outcomes, not products.
Michelin
What it had to solve
In a product-driven industry where tires were bought like spare parts, large European transport companies cared less about owning rubber and more about predictable cost, fuel consumption and uptime.
How it works
In 2000 Michelin, a worldwide tire leader, launched Michelin Fleet Solutions for large European transport companies: a comprehensive tire-management offer in which the customer paid for kilometers driven rather than for tires. Michelin kept the tires, managed them end to end, and charged per kilometer plus a service fee.
The shift was a bet that a product-driven company could sell a result. The offer bundled tire selection, maintenance, retreading and breakdown service into one predictable bill, and even carried contractual commitments on outcomes like fuel consumption.
Early years were hard — by 2003 an IMD case study found expansion far below expectations and terrible profitability, and Michelin faced a decision point on whether to abandon the model. It persisted, and the model matured: the current Michelin Fleet Solutions page still sells 'price per mile peace of mind' with monthly billing and all tire service included.
Why it lands
- It changed the unit of sale from a product to an outcome, making tire cost predictable and aligning Michelin's incentives with fleet uptime.
- The manufacturer kept ownership and maintenance risk, so it was motivated to design durable, retreadable, fuel-efficient tires.
- It became the canonical 'selling miles, not tires' case that a generation of servitization research and teaching is built on.
What it did
The case became the textbook example of servitization and is still sold today: Michelin's own fleet-solutions page still advertises pay-per-mile tire management, and analysts now cite 'selling miles' as the canonical product-as-a-service benchmark.
What you can take
Change what the customer pays for, not just the price: pricing the outcome instead of the product aligns your incentives with theirs and turns commodity hardware into a relationship.
Since then
Michelin kept iterating rather than retreating: the offer expanded from Europe to fleets worldwide, connected-tire and predictive-maintenance services were layered on, and pay-per-use tire contracts remain a live product line. The 2000 decision is now cited as one of the earliest large-scale product-as-a-service moves by a manufacturing company, even though its first three years were nearly a failure — a reminder that the model's payoff took more than a decade.
Sources
- Business Model Innovation: Michelin Fleet Solutions - From Selling Tires To Selling Kilometers
- Michelin Fleet Solutions
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