Tire-As-A-Service: Meet François Johnston, Founder of Johnston Circular and ex-General Manager at Michelin
In this episode, Yann Toutant speaks with François Johnston, Founder of Johnston Circular and former Head of Michelin’s Tire-as-a-service business, about why value-based pricing, high reuse rates, and operational excellence are key to making product-as-a-service both profitable and truly circular.
Tire-As-A-Service: Meet François Johnston, Founder of Johnston Circular and ex-General Manager at Michelin
In this episode, Yann Toutant speaks with François Johnston, Founder of Johnston Circular and former Head of Michelin’s Tire-as-a-service business, about why value-based pricing, high reuse rates, and operational excellence are key to making product-as-a-service both profitable and truly circular.
Guest speaker
- Founder of Johnston Circular (2023), a consulting firm that helps companies design and implement service-based and circular business models to drive both economic value and environmental impact.
- Expert in circular economy and “economy of functionality”, focusing on shifting businesses from selling products to delivering usage-based services.
- Spent 25+ years at Michelin, where he held roles in finance, sales, and led the global Tire-as-a-Service business.
- Recognised thought leader and speaker on service-based business models and sustainability transformation, including teaching at Sciences Po Paris.
- Founder of PACCT for Sustainability, a European network promoting knowledge-sharing around circular and service-based economic models.
About Michelin
Michelin is a world-leading manufacturer of life-changing composites and experiences.
Pioneering materials science over more than 130 years, Michelin is uniquely positioned to make decisive contributions to human progress and a more sustainable world.
Drawing on technological leadership in polymer composites, Michelin is constantly innovating to manufacture high-quality tires and components for critical applications in demanding fields as varied as mobility, construction, aeronautics, low-carbon energies, and healthcare.
Tire-As-A-Service
Michelin sells performance (kilometers driven and uptime) rather than tires, aligning its revenue with actual customer usage.
This model shifts incentives toward durability, encouraging longer tire life, reduced waste, and increased retreading.
Data and IoT enable predictive maintenance and better asset utilization across customer fleets.
Michelin manages the full tire lifecycle from usage to retreading and recycling.
The model relies on strong operational capabilities and risk-sharing, making circularity economically viable.
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Key insights
"Success in product-as-a-service comes down to three things: monetizing real customer benefits like efficiency and peace of mind, delivering a seamless 24/7 experience that keeps operations running safely, and mastering the service value chain to execute flawlessly in the field."
"Value-based pricing is the number one lever of value creation. At Michelin, moving from selling tires to charging per mile means profitability depends on reuse, reaching around 50% versus 15 to 25% in the market, not because it’s green, but because it’s in Michelin’s financial interest to reuse as much as possible."
"Product-as-a-service is a premium play: it requires excellent, long-lasting products, a strong brand trusted for quality, and the proven ability to operate services consistently alongside customers’ operations."
"Shifting to product-as-a-service is not just another way to sell your product, it’s a transformation of the value chain. The story begins when you sign the contract as opposed to products when the story ends when you sign the contract, and profitability is then driven by operations. Above all, it requires a shift from product-centric to service-centric."
"It’s not just another way to push products on the market, it’s a new offer. You need a complete, in-depth sales kit with a pricing model that sales teams understand and make their own, you need to onboard them from day one of the design, and if you want to scale, you need intense training and strong support from customer success teams to make the contract work on a daily basis."
"It is not because an object is connected that it’s going to generate value… first you’ve got to understand what your customer needs in terms of data."
References
Johnston Circular: www.johnstoncircular.com
Michelin: www.michelin.com
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