Michelin will hire about 500 people a year over the next three years and will invest more than €100 million (£85 million) at its research and development centre in Clermont-Ferrand.

However, the French tyre maker will also close a factory this year, as part of a wider reorganisation leading to nearly 500 job losses, in response to weaker demand and tough competition. It is also offering its French staff the chance to take early retirement, in a move that it expects to lead to the departure of a further 1,800 older workers.

As part of a realignment of its domestic operations, it will close its plant at Seclin, near Lille in northern France, and move production of its premium tyres to its Les Gravanches facility near Clermont-Ferrand. The revamp will also affect its earthmover tyre plant at Montceau, its lorry tyre plant at Tours and its SUV tyre manufacturing operations at Cholet.

Michelin has already begun talks with unions over the changes, including the Seclin closure, which will take place later in the year. They will involve up to 495 voluntary redundancies, with a further 598 people moving to a different job within the company. The group insists that none of the planned redundancies will be forced.

The reorganisation follows similar changes at Michelin’s plants in Italy and Spain. The group’s four plants in the UK are unaffected. Michelin said that the changes were necessary amid a highly competitive business environment. It added that they showed its commitment to maintaining a solid manufacturing base in France.

Demand for tyres has been hit hard, in line with falling sales of cars and commercial vehicles, as consumers and businesses cut back on spending and struggle to obtain finance. European tyre makers are also facing increasing competition from Asian rivals, which has led to prices falling by up to 50 per cent in the past five years.

In April Michelin reported a 14 per cent fall in first-quarter sales to €3.5 billion. Continental, its rival, has announced the closure of its factory in Clairoix, north of Paris, with the loss of 1,120 jobs, while Goodyear Dunlop has laid off 820 workers at its Amiens plant in the north.

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